The Democratic Republic of Congo (DRC) will soon be doubling taxes on cobalt mining. The DRC government hopes that the increased taxes on cobalt and other minerals will help it collect sufficient revenues to pay public servants and fund the country's social projects.
The DRC holds over 60% of the world's cobalt supplies, a key ingredient in the manufacturing of electronic devices and electric vehicle's rechargeable batteries. So important is cobalt to the technology ecosystem that in 2017 Volkswagen (VW) started making strategic moves looking to secure supplies of cobalt for the next 10 years as it moves into mass production of electric vehicles.
The country's Chamber of Mines has commented that the new tax rates will have a negative impact on mining in the country. It further added that it was surprising that the DRC government had completely ignored its advice regarding mining taxes and royalties.
A report published in 2017 suggested that the world may in fact be running out of technology minerals such as cobalt and coltan - another mineral found in the DRC that is key to the manufacturing of electronic devices. The report titled ""Mineral supply for sustainable development requires resource governance" was published by a team of researchers from various organizations in South Africa, USA, South America, Europe, and Australia. Although the move by the government to increase taxes is being welcomed in some quarters, there is no mention on how the DRC will combat child labor at many of the cobalt and coltan mines.
Under the new revised mining codes expected to be signed into law by President Joseph Kabila soon, the DRC will classify cobalt as a "strategic substances", this will allow the government to tax it at a higher rate. Increased taxes also mean that we are likely to see an increase in electronic device retail prices, e.g. smartphones, given the significant increase in the manufacturer's input costs.