Entreprise Générale du Cobalt (EGC) recently signed an offtake agreement with Trafigura Pte Ltd. EGC is a Congolese mining company, owned by the state of the Democratic Republic of the Congo (DRC), which holds the monopoly for the purchase, treatment, transformation, sale and export of cobalt extracted by artisanal miners or artisanal mining companies in the DRC.
“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 formalization of this industry,” said Jean-Dominique Takis Kumbo, EGC managing director. “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.”
Through the agreement, Trafigura will 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.
“Cobalt has a vital role to play in the world’s energy transition and electrification and artisanal mining provides an important livelihood in the DRC,” Trafigura Executive Chairman and CEO Jeremy Weir said. “Ultimately, the legitimacy of efforts to formalize 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.”
In support of this agreement, EGC will establish a technical committee through which Trafigura and the international nonprofit organization 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-mechanized operations at the Mutoshi concession in the DRC.