According to Grace Mabaya, a Mining Ministry senior official in the Democratic Republic of Congo, the production of cobalt and copper is unlikely to face adverse effects this year despite the ongoing unrest in the Middle East. The Middle East supplies many key mining inputs, such as sulfuric acid, and a number of metal producers have faced shortages that have triggered production cuts.
However, Congo appears to be faring better. The war between the U.S. and Iran that started at the end of February disrupted supply chains of sulfuric acid, a crucial input during the production of cobalt and copper. That war has since halted after the warring parties signed a temporary ceasefire in June.
For a long time, Zambia has been a major supplier of sulfuric acid to the DRC but has recently imposed export restrictions on this input so that its own domestic producers could have enough to meet their needs. As a result, some mining firms in Congo have scaled down their production targets in the wake of the first quarter production stats that reached record levels.
During Q1 of this year, exports of cobalt reached approximately 17,054 tons while 6.3 tons of gold with a market value of $732 million were exported in the same quarter. Copper exports also notched a record, hitting 823,887 tons.
Mabaya revealed that the country hadn’t experienced any disruptions to its mining industry as a result of input shortages. He added that output forecasts remained positive for the remaining months of the year as a result of stable mining activities and robust demand for copper.
He explained that most mining firms in the country have established long-term supply relationships and have stockpiles of the needed inputs. The use of suppliers within the region has also cushioned the mining industry from any possible disruptions triggered by turmoil in the Middle East, he added.
That notwithstanding, the mining official doesn’t rule out the possibility of operational disruptions to mining activities in case the tensions in the Middle East persist for a lot longer. Delivery timelines could increase and costs could increase if conditions don’t quickly return to normal, he said.
He went on to explain that the country has adopted a policy of imposing export restrictions and mining quotas in order to influence global metals markets. Chinese firm CMOC and Glencore were the leading cobalt and copper exporters from the DRC during the first quarter of the year.
Other players in the copper ecosystem, such as Numa Numa Resources Inc., could learn valuable lessons from the way Congo’s mining industry has so far managed to avoid being adversely affected by the Middle East crisis.
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