The Democratic Republic of Congo is preparing to more than double a tax on two-thirds of global cobalt supply, potentially increasing the cost of the critical battery metal just as the world begins to embrace electric vehicles.
Congo, the world’s biggest cobalt producer, will increase the royalty miners pay on exports of the metal to 5 percent from 2 percent if it opts to categorize cobalt as a “strategic substance,” Mines Minister Martin Kabwelulu told the country’s Senate last week.
The new classification is part of an overhaul of mining legislation that is fiercely opposed by the industry, which says the law may deter future investment. Under the revised code, backed by the government and being scrutinized by parliament, the tax on base metals including copper and cobalt will increase to 3.5 percent from 2 percent.
If approved by the Senate, the law will also allow the state to select “strategic” metals, likely to include cobalt, and tax them at a higher rate of 5 percent, Kabwelulu said.
A byproduct of copper and nickel mining used to harden steel, cobalt stepped into the global spotlight last year as prices surged. The metal’s efficiency in conducting electricity has made it essential for rechargeable batteries used in electric cars produced by companies including Tesla Inc. and Volkswagen AG.
For the rest of this article: https://www.bloomberg.com/news/articles/2018-01-10/congo-may-more-than-double-tax-on-critical-global-cobalt-supply