Entreprise Générale du Cobalt enters into a trading agreement with Trafigura with the aim to transform the artisanal and small-scale cobalt mining sector in the Democratic Republic of the Congo
Entreprise Générale du Cobalt (“EGC”) has today announced the signing of a trading agreement with Trafigura Pte Ltd (“Trafigura”).
The trading agreement includes the provision of finance by Trafigura to fund the creation of strictly controlled artisanal mining zones, the installation of ore purchasing stations and costs related to the transparent and traceable delivery of cobalt hydroxide to Trafigura on an export cleared basis. Under the supply terms, EGC will ensure that the ore marketed by Trafigura complies with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
In support of this agreement, EGC will establish a Technical Committee through which Trafigura and the international nonprofit organisation Pact, among others, will promote responsible sourcing diligence. The NGO Pact works alongside local communities in nearly 40 countries to eradicate poverty, notably by making artisanal and small-scale mining formal, safer and more productive.
In 2018, Trafigura and Pact first piloted an approach to the responsible sourcing of cobalt from semi-mechanised operations at the Mutoshi concession in the DRC.
Jean-Dominique Takis Kumbo, EGC’s Managing Director, stated: “Today’s announcement is very important for the Congolese artisanal cobalt sector. This partnership responds to the will of the Government through its initiative for the defence and promotion of national artisanal production. For our country to benefit from the intrinsic value of cobalt, currently boosted by the development of carbon-free energies, it was essential that measures be taken to support the formalisation of this industry. In fact, by cleaning-up this sector, which has been subject to recurring illegality and fraud for several years, and of which our artisanal miners are the first victims, society stands to benefit as a whole. Our mission is therefore as much in a perspective of the defence of our most vulnerable communities, as in the affirmation of the central positioning of the Democratic Republic of Congo, which has 70 percent of the world reserves of this strategic mineral. We are confident that Trafigura, through its experience and expertise, will support us in our mission and ultimately enable us to achieve our goals."
Trafigura’s Executive Chairman and CEO, Jeremy Weir, commented: “Cobalt has a vital role to play in the world’s energy transition and electrification. Artisanal mining or ‘ASM’ provides an important livelihood in the DRC. Ultimately, the legitimacy of efforts to formalise and bring controls to the sector will depend on broad-based consultation and assurance that OECD standards will be upheld. We will continue to engage and collaborate with stakeholders to be part of the solution to supply cobalt responsibly.”
President and CEO of Pact, Caroline Anstey, said: “Artisanal and small-scale miners are one of the world’s largest, and most vulnerable, workforces. For decades, Pact has been working with governments, industry and miners themselves to maximize ASM’s contributions to development, particularly at the local and community level. We will leverage this expertise and experience, as well as our successful work with Trafigura and its partners, to support responsible sourcing and sustainable small-scale cobalt production through the collaboration between EGC and Trafigura. Our objective is to play our part in ensuring ASM material is not only responsibly sourced but provides social and economic benefits to artisanal miners and nearby communities.”
For more information about Trafigura’s Responsible Sourcing Programme, click here or https://www.trafigura.com/responsibility/responsible-sourcing/.
Entreprise Générale du Cobalt ("EGC") is a Congolese mining company, ultimately owned by the state of the Democratic Republic of the Congo. Under the terms of decrees 19/15 and 19/16 dated 5 November 2019, EGC holds the monopoly for the purchase, treatment, transformation, sale and export of cobalt extracted by artisanal miners or artisanal mining companies in the Democratic Republic of the Congo. EGC has been entrusted by the country's high authorities with the mission of organising and supervising artisanal and small-scale mining of cobalt in the Democratic Republic of the Congo, by developing a responsible value chain.
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including a majority ownership of global zinc and lead producer Nyrstar which has mining, smelting and other operations located in Europe, Americas and Australia; a significant shareholding in global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management. The Company is owned by around 700 of its 8,000 employees who work in 80 offices in 41 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD171.5 billion in 2019. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade.
A nonprofit international development organization founded in 1971, Pact works on the ground in 40 countries to improve the lives of those who are challenged by poverty and marginalization. We serve these communities because we envision a world where everyone owns their future. Pact’s Mines to Markets program uses an integrated, market-based approach and brings together government, industry and miners themselves to make ASM formal, safer and more productive.