MINEX Forum

Tag: Democratic Republic of Congo

  • ERG Shareholders Consider Splitting Kazakhstan and International Mining Businesses

    ERG Shareholders Consider Splitting Kazakhstan and International Mining Businesses

    The owners of Eurasian Resources Group (ERG) are considering a major restructuring that would separate the company’s Kazakhstan operations from its international mining assets, according to people familiar with the discussions.

    The proposed split would divide the group between its two principal private shareholders, Shakhmurat Mutalip and Shukhrat Ibragimov. ERG currently generates most of its revenue from iron ore, ferrochrome and aluminium production in Kazakhstan, while also operating mining assets in the Democratic Republic of Congo and Brazil.

    Under the proposal, Shukhrat Ibragimov, ERG’s Chief Executive Officer and Chairman since 2024, would exchange his family’s 20% shareholding for ownership of the international business, which would be transferred into a newly created company. Shakhmurat Mutalip and the Government of Kazakhstan, which holds a 40% stake in ERG, would retain ownership of the group’s Kazakhstan mining and metallurgical operations.

    If completed, the restructuring would strengthen Mutalip’s influence over ERG’s domestic business, while allowing Ibragimov to focus on the company’s international portfolio, particularly its operations in the Democratic Republic of Congo. ERG owns several producing and development-stage assets in the country, including Metalkol, one of the world’s largest cobalt producers and a significant copper supplier.

    The discussions follow Mutalip’s acquisition of a 39.3% stake in ERG in May from the families of co-founders Patokh Chodiev and Alexander Mashkevich, reflecting a broader transition in Kazakhstan’s business landscape. Last month, the chairman of Mutalip’s construction company was appointed Chief Executive Officer of ERG’s Kazakhstan business.

    According to sources, approximately US$2 billion of ERG’s debt would be transferred to the new international company. The business would continue to face operational challenges in the Democratic Republic of Congo, including illegal mining activities affecting concessions operated by Metalkol and Boss Mining SAS.

    The potential restructuring comes amid growing international interest in critical mineral supply chains. The United States has increased its engagement in the Democratic Republic of Congo’s mining sector as part of efforts to diversify supplies of copper and cobalt away from China. In December, Washington signed a strategic partnership with the Congolese government aimed at supporting American investment in mining and infrastructure projects.

    Neither ERG nor representatives of the shareholders immediately commented on the reported plans.

  • Kazakhstan and DR Congo Sign Mining and Geology Cooperation Agreements

    Kazakhstan and DR Congo Sign Mining and Geology Cooperation Agreements

    Kazakhstan’s President Kassym-Jomart Tokayev and Democratic Republic of Congo (DRC) President Félix Tshisekedi have held talks, according to Kapital.kz citing the Akorda press service. The two leaders oversaw the signing of interagency agreements covering diplomatic consultations as well as cooperation in mining and geology.

    Both nations hold vast natural resources and see potential in becoming reliable partners for mutually beneficial projects. The DRC plays a central role in global supply chains of critical minerals, accounting for approximately 76% of the world’s cobalt production, 14% of copper, 8.3% of tin, 42% of tantalum, and 40% of coltan, alongside deposits of other strategic metals essential to high-tech industries.

    Kazakhstan’s Eurasian Resources Group (ERG) already operates successfully in the DRC with the support of Congolese authorities. The new agreements are expected to accelerate the development of bilateral ties in the resource sector.

    In addition, the two presidents agreed to hold regular consultations and maintain close working contacts between their foreign ministries to ensure steady progress in cooperation.

  • Umicore and STL1 Forge Exclusive Partnership for Germanium Valorization

    Umicore and STL1 Forge Exclusive Partnership for Germanium Valorization

    In a groundbreaking development for the mining sector in the Democratic Republic of Congo (DRC), Umicore, a global leader in materials technology and recycling, has inked an exclusive, long-term partnership agreement with STL1, a subsidiary of Gécamines. This partnership is set to revolutionize the valorization of germanium extracted from the Big Hill2 tailings site located in Lubumbashi, DRC.

    Under the terms of the agreement, Umicore will lend its expertise to optimize STL’s newly established processing facility at the Big Hill site. Leveraging its refining and recycling proficiency, Umicore aims to enhance the extraction process of germanium, a critical metal used in high-tech applications. In return, Umicore secures exclusive access to the processed germanium for its material solutions production.

    STL, over the years, has been extracting metals including zinc, silver, cobalt, copper, and germanium from the Big Hill’s extensive reserves. With a century’s worth of mining activity contributing to 10 million tons of metals-containing slags, STL’s focus now shifts to maximizing the value derived from these resources within the DRC. This strategic move aligns with its commissioning of a new hydro-metallurgical facility in 2023, aimed at optimizing the valorization of germanium concentrates.

    The collaboration between Umicore and STL marks a significant milestone in enhancing the local mining industry’s capabilities. The partnership not only promises to diversify Umicore’s germanium supply sources but also ensures a steady, multi-annual offtake of substantial volumes, bolstering the resilience of the supply chain.

    The commencement of refining operations by Umicore is slated for the final quarter of 2024, with subsequent plans for ramping up STL’s germanium extraction capacities. Umicore’s Electro-Optic Materials (EOM) Business Unit stands to benefit from this agreement, as it specializes in utilizing and recycling germanium for optical and electronic applications such as fiber optics, solar cells, and electronics.

    Moreover, the collaboration extends beyond operational and technical support, with Umicore committed to skill development initiatives to analyze germanium content in tailings for recycling purposes. This aligns with STL’s ambitions to expand downstream germanium product offerings while adhering to the highest Environmental, Social, and Governance (ESG) standards.

    The partnership holds promise for stimulating economic growth, creating job opportunities, and fostering skill development within local communities. Mathias Miedreich, CEO of Umicore, emphasized the significance of the agreement in advancing circular business models and contributing to the local economy through sustainable resource utilization.

    In echoing the sentiment, Guy Robert Lukama, Chairman of Gécamines SA/STL, underscored the strategic importance of the partnership in realizing the organization’s vision to emerge as a major player in strategic minerals processing. He highlighted the potential for job creation and economic empowerment, emphasizing the pivotal role of partnerships in driving industrial revolution and energy transition agendas.

    Grant Dempsey, General Manager of STL, reiterated the transformative impact of the collaboration, emphasizing its potential to bolster the local economy, industry, and environment. The partnership, he noted, will not only enhance operational efficiency but also contribute to emission reductions and resource optimization across various sectors.

  • Explained: The EU’s handicap in the global race for critical raw materials

    Explained: The EU’s handicap in the global race for critical raw materials

    The EU is highly dependent on third countries for the raw materials needed to engineer its energy transition and digital transformation.

    Russia’s war in Ukraine and the need to wean itself off fossil fuels in order to reach climate targets have prompted the EU to accelerate its green transition in recent months but also forced it to acknowledge its dependencies over access to critical raw materials.

    In the global race for raw materials, the EU faces multiple challenges.

    The first one is China, which recently started restricting exports of gallium and germanium, two metals essential for the production of semiconductors, in response to Western curbs on Beijing’s access to micro-processing technology.

    The EU considers both materials of high strategic importance. As well as semiconductors and other electronic devices, they are used for military applications such as missile defence and radar systems.

    Beijing’s restrictions come as a stark warning as the EU attempts to diversify and boost domestic supply of raw materials to reduce dependency on third countries.

    Reliance on ‘low-governance’ countries

    But diversifying supply chains could mean the EU has to source these materials from countries that don’t adhere to the same standards.

    Recent data suggests the EU’s supply is highly dependent on countries that have a low governance level, based on indicators including political stability, rule of law and corruption control.

    The EU’s Critical Raw Materials Act (CRMA), adopted in March this year, stipulates that EU strategic projects to scale up supply must be assessed taking into account all aspects of sustainability, including environmental protection, socially responsible practices and respect for human rights such as the rights of women.

    But many countries feeding EU supply are not aligned with European values. This raises concerns about the impact on the local communities where materials are mined, as well as the potential exploitation of natural resources.

    For example, the Democratic Republic of Congo, whose governance indicators are among the lowest in the world, supplies 63% of the EU’s cobalt, which is essential for manufacturing batteries for electrical vehicles.

    Diversifying supply a challenge

    The EU is also highly dependent on single countries for key materials such as Magnesium (China, 97%), Lithium (Chile, 97%), Iridium (South Africa, 93%) and Niobium (Brazil, 92%). These dependencies make supply chains vulnerable.

    The Critical Raw Materials Act aims to ensure no third country provides more than 65% of the Union’s annual consumption of any raw material.

    But diversifying supply is complex when refineries of many essential materials are monopolised by one or more global powers. China dominates the refining market for many critical raw materials.

    Russia’s invasion of Ukraine and the ensuing energy crisis has shown the acute dangers of over-reliance for supplies of raw materials. China’s increasingly antagonistic stance and the political instability in many African countries have also served as reminders of the fragility of the EU’s trading relationships.

    A spiralling global demand

    The demand for raw materials is growing steeply, as developed countries race to digitalise and decarbonise their economies. This can only happen with sufficient supply of raw materials, meaning countries must scale up extracting, refining and recycling operations.

    The global demand for lithium, for example, is set to increase a staggering 89-fold by 2050, according to the European Commission. Demand for gallium will multiply 17-fold during the same time.

    The Critical Raw Materials Act sets targets for the Union to extract 10%, process 40% and recycle 15% of its annual consumption of raw materials by 2030.

    To meet these targets and compete on the global stage, European Commission President Ursula von der Leyen has said the EU needs to speed up investments in research and development, recognising that the bloc’s global share of R&D expenditure has fallen 10% in the last 20 years.