The Democratic Republic of the Congo has announced plans to put into effect a radical new mining code this week that will, in theory, divert more profit from mining company shareholders to the citizens of the Congo themselves. This new code could potentially blast prices for such electronic devices as electric car batteries and smartphones around the world, creating a dangerous economic reaction that might mimic the Great Recession of the 1990’s.
The Democratic Republic of the Congo is the world’s leading producer of cobalt — nearly forty percent of the cobalt used in electronic devices is sourced from the Congo. This means that any price setting the country’s leaders decide on will automatically be felt in factories and stores across China, Europe, and the Americas. Managers from some of the biggest mining interests in the world, such as Glencore PLC and China Molybdenum, met with President Joseph Kabila in the capital of Kinshasa this week to clarify their concerns about the new mining code. But Congolese officials have said that the new code plays no favorites among mining franchises — all will have to pay equally higher tariffs on their ore.
President Kabila is currently in a power struggle to retain office after his defeat in last year’s election. He has refused to step down from office, and most diplomatic and financial specialists believe that the increased income from mining code tariffs will go directly into his pockets to help keep him in power. If such a scenario plays out, the price of cobalt and other rare metals needed for electronics will steadily increase through 2018.