Cobalt Red: How the Blood of the Congo Powers Our Lives

by Siddharth Kara

A senior official at Gécamines offered a different theory: “Glencore shut Mutanda to pressure the Congolese government to provide better terms on taxes.” The official explained that despite heavy opposition from Glencore, including an in-person meeting in Kinshasa between then CEO Ivan Glasenberg and Joseph Kabila on March 7, 2018, the DRC government declared cobalt to be a “strategic” substance on November 24, 2018. Doing so initiated an increase in the royalty rate from 3.5 percent to 10 percent that mining companies had to pay for extracted cobalt. The new policy also established a 50 percent tax on superprofits. The tax on superprofits was to be triggered when a commodity’s price increased by more than 25 percent above levels that were cited in the mining company’s initial bankable feasibility study to assess the geologic reserves in the concession prior to commencing operations. If the price of cobalt rose enough, mining companies would be on the hook for the superprofit tax. Cobalt prices on the London Metal Exchange in fact increased by more than 100 percent from their lows in the summer of 2019 to the summer of 2021.