BMI Research:
"Despite rising risks, we do not expect changes introduced by the new mining code to impact our growth outlook for DRC's mining industry over the coming quarters for the following reasons:
- As outlined in previous analysis even with the announced hike in mining levies, the DRC's royalty rates will remain among the most competitive in the world for key sources of income, including copper and gold, meaning the domestic investment environment is unlikely to be impacted
- Key domestic producers such as Glencore are in a much-improved financial position to deal with higher costs in 2018, buoyed by record earnings over FY2017 stemming from the metal price rally last year. We expect prices for copper, copper and cobalt to remain elevated in 2018
- The DRC will continue to be the only reliable source of cobalt in the short term, accounting for approximately 50% of global reserves and over 80% of global exports as of 2017, while major deposits in Australia or Canada are yet to be developed and could take several years to reach commercial production. As such, we believe domestic producers will have little option but to comply with the new regulations to continue catering to growing demand fuelled by a burgeoning electric vehicle (EV) market
- Finally, the government's announcement that it will continue engaging stakeholders and review the new regulations on a case-by-case basis following the passing of the law, leaves room for flexibility and reduces the risk of conflict between both parties in the coming months"
https://www.miningreview.com/new-drc-mining-law-will-not-alter-positive-outlook/
Certainly not a popular point of view with the punters banging on about their low grade high processing cost tripe in Canada and Australia.
They believed the new mining code was like the messiah, enabling them to attract the billion dollars required to turn cobalt anomalous ultra high acid consumption mud into cobalt chemicals.
No - the majority of the investment - to build actual mines - will continue to go into the world's tier 1 cobalt producing jurisdiction, the DRC.
Amusingly while certain Australian / Canadian "developers" lock away totally commitment free 14 year option agreements for discounted supply contingent on borrowing just shy of a billion, the DRC operators of actually economic / addressable reserves are holding out on even more than a 2 year offtake agreement, knowing they are in the driving seat. Like Nzuri.
You can post all the crap news stories you want, doesn't change what mother nature gave south eastern congo.
