August 15, 2019 - Swiss miner Glencore said this month that it will be suspending production at one of the world's largest cobalt mines in Mutanda in the Democratic Republic of the Congo by the end of the year.  The move is likely an attempt to force the government’s hand over corporate taxes, according to Indigo Ellis, Africa Analyst at Verisk Maplecroft. Glencore’s size and diversified nature allows it to influence the global cobalt market, she argues.  Glencore wrote to employees saying that the Mutanda mine is no longer economically viable over the long term, also citing the DRC’s new mining code as among the reasons for the closure.    

- Glencore CEO Ivan Glasenberg is “probably seeking special considerations for Glencore’s operations in DR Congo,” Ellis says.
- “Top of the wish list would be an exemption to the 10% strategic substance levy on cobalt, or the onerous super-profits tax.”
- Glencore paid the government $626m in taxes from Mutanda in 2018 – more than 10% of the government’s target budget.

The DRC is the world’s largest producer of cobalt, a metal used to make cell phone batteries and other consumer electronics. Cobalt prices have halved over the last year.But lower cobalt prices are giving Glencore the chance to flex its muscles in the DRC. Mutanda alone accounts for almost 20% of global output.

- This month, analysts at Fitch wrote that the closure will be enough to provide support for global cobalt prices going into 2020.

- Further project delays or cutbacks by other cobalt miners could end current oversupply in the cobalt market and drive a faster-than-expected recovery in prices, Fitch says.

- “It may be that putting Mutanda under care and maintenance will not take place, and the benefits of a price jump will be enough to make operating Mutanda profitable again by the end of 2019,”

Ellis says.Mutanda produced 27,300 tonnes of cobalt last year – more than half Glencore’s total output – and 199,000 tonnes of copper. The mine has about 10,000 tonnes of unsold cobalt.

July 2012 - Glencore has spent the equivalent fo $480 million to take majority control over the Mutanda Mining Sprl copper mining and solvent extraction/electrowinning (SX/EW) operation in the DRC.  Glencore paid $340 million to acquire 24.49% of Samref Overseas SA from High Grade Minerals and a further 1% equity interest in Samref Congo Sprl from Groupe Bazano Sprl in two separate share purchase agreements.  The deal takes Glencore's stake in Samref Overseas from 50% to 74.49% and its effective stake in Mutanda consequently to 60%.