Glencore’s Kamoto Copper Company in the Democratic Republic of Congo confronts a royalty dispute with DGRAD, which claims the company owes over €800 million. Despite the conflict, production levels of copper and cobalt remain stable. Recent actions by tax authorities included freezing bank accounts and temporarily sealing a warehouse, but operations have largely resumed. The DRC has become a crucial player in the global copper and cobalt markets, with rising export levels since 2015.
A copper mine owned by Glencore Plc in the Democratic Republic of Congo is currently facing a dispute concerning unpaid royalties with the local tax authorities. The Directorate General of Taxes and Revenue, known by its French acronym DGRAD, claims that Kamoto Copper Company (KCC) owes the Congolese government a significant sum exceeding €800 million ($894 million), according to informed sources. Recently, the bank accounts of the company were frozen, and tax agents temporarily sealed a warehouse storing metals. However, operations were reported to have resumed post-sealing. Kamoto Copper Company, in which Glencore controls a 75% interest, is among the largest copper mines in the region, with an export of 200,000 tonnes of copper and 16,000 tonnes of cobalt anticipated for 2023, as per government statistics. The ongoing contention does not seem to have influenced production levels, with figures showing 89,000 tonnes of copper and 11,700 tonnes of cobalt produced in the first half of the year. Glencore is also managing another substantial copper-cobalt venture in the Congo. A representative from the finance ministry, accountable for overseeing DGRAD, mentioned that efforts are underway to review KCC’s financial records to address the dispute, aiming to balance the business environment with the state’s financial interests. Further statements were not provided. Despite the tensions, tax activities have faced limitations, such as the freeze on bank accounts and a brief seizure of property following unsuccessful negotiations. Notably, the DRC has seen a dramatic increase in copper exports, tripling since 2015, and has surpassed Peru as the world’s second-largest copper producer. Additionally, the DRC remains the predominant source of cobalt, contributing approximately three-quarters of global supply last year.
The Democratic Republic of Congo is renowned for its substantial natural resources, particularly copper and cobalt, which are essential for modern technology and the transitioning to renewable energy. Glencore holds a significant position in the mining sector within the DRC, as evidenced by its substantial investments in large mines such as Kamoto Copper Company. Disputes over tax and royalty requirements are not uncommon, particularly in regions where local authorities aim to maximize state revenue from extraction industries. The ongoing deliberations regarding the €800 million royalty claim raise important questions regarding compliance with local regulations and the balance of interests between multinational corporations and local governments.
In summary, the conflict between Glencore’s Kamoto Copper Company and the DGRAD over unpaid royalties signifies not only financial implications but also broader concerns regarding regulatory compliance and corporate governance in the mining sector of the Democratic Republic of Congo. As the country solidifies its status as a leading producer of cobalt and copper, it faces ongoing challenges in negotiating fair arrangements that benefit both the state and foreign investors.
Original Source: www.mining.com
