Glencore’s Kamoto Copper Mine Faces €800 Million Royalty Dispute in Congo

Glencore’s Kamoto Copper Company in the Democratic Republic of Congo is facing a dispute with local tax authorities over alleged unpaid royalties exceeding €800 million. Following the freezing of its bank accounts, KCC’s operations have remained steady, producing significant quantities of copper and cobalt in 2023. The situation escalated with temporary seizures of storage facilities, reflecting ongoing tensions as Congo’s mining industry grows.

Glencore, a Swiss multinational commodity company, is currently involved in a significant dispute with Congolese tax authorities concerning unpaid royalties amounting to approximately €800 million ($894 million). The tax agency, known by its French acronym DGRAD, claims that Kamoto Copper Company (KCC), which is predominantly owned by Glencore with a 75% stake, owes this amount to the state. The situation escalated earlier this year when KCC’s bank accounts were frozen by the authorities, and a warehouse used for metal storage was temporarily sealed off just this past week. Despite the intense dispute over royalties, production activities for copper and cobalt at KCC remain uninterrupted, with the mine producing 89,000 tons of copper and 11,700 tons of cobalt in the first half of the year. In total, KCC exported 200,000 tons of copper and 16,000 tons of cobalt in 2023, solidifying its position as one of the largest mines in the Democratic Republic of Congo. The tax agency’s recent actions included shutting down a warehouse in Kolwezi, although it was reopened the following day. Discussions between Glencore and the DGRAD apparently proved unfruitful, leading to increased enforcement actions against KCC. Historically, KCC has remitted a total of $2.3 billion in tax and royalty payments between 2021 and 2023. The Congolese government, bolstered by a surge in copper exports, is solidifying its role as a leading producer of this essential metal and cobalt in the global market.

The conflict between Glencore’s Kamoto Copper Company and the Congolese tax authority reflects broader tensions in mineral-rich nations where substantial natural resources are being mined. With copper being critical for energy transition technologies, the Democratic Republic of Congo has seen a dramatic increase in copper exports, surpassing Peru as the world’s second-largest producer. This mine is pivotal to the local economy, providing substantial royalties and taxes to the Congolese government, which are essential for public services and infrastructure development.

In summary, the dispute between Glencore’s Kamoto Copper Company and the Congolese tax authorities over €800 million in alleged unpaid royalties represents a significant legal and financial conflict that may affect the operations of one of the world’s largest copper mines. While production continues uninterrupted, the implications of this dispute may have broader ramifications for investment in the region’s mining sector and its governance.

Original Source: www.miningweekly.com