EXCLUSIVE: DRC could stop granting export waivers of copper concs from September - sources

Copper miners operating in the Democratic Republic of Congo (DRC) have been informed that they will not be able to renew their waivers to export copper concentrate from September onward, Fastmarkets has learned.

“Communication was in place in recent months, which only extended the moratorium from February to the end of this month,” a well-informed source said.

The DRC ministry of mines did not respond to Fastmarkets’ requests via telephone and email for comment at the time of publication.

Since 2013, the biggest copper-producing country in Africa has enacted a ban on the export of copper concentrate multiple times to capture a greater portion of the mining value chain by increasing domestic refined metal output.

But for many years during the ban, miners operating in the DRC could apply for waivers to sell certain amounts of concentrate overseas.

Key copper mining operations in DRC include Glencore’s Katanga, China Railway’s Sicomines, ERG’s Frontier and CNMC’s Deziwa.

“It [the ban] has not been fully implemented because there was no smelter capacity to treat it. Now there is, so it’s possible they will ban exports and say it should get sold to the new Lualaba Copper Smelter (LCS),” a second source said.

New DRC smelter commences
DRC’s decision to retract waivers comes a few months after the first major primary copper smelter in the DRC commenced operations in January this year.

China Nonferrous Mining Corp’s (CNMC) LCS is targeting output of 100,000 tonnes of electro-refined (ER) copper this year, Fastmarkets reported on January 16.

While LCS can process concentrate made mainly of sulfide ores in high heat furnaces, the majority of the DRC’s copper facilities primarily produce solvent extraction and electrowinning (SX-EW) copper cathodes mainly from oxide ores. Glencore and CNMC are amongst those running SX-EW plants in the country.

In 2019, mined copper production from DRC amounted to 1.43 million tonnes, including copper cathodes and copper in concentrate, according to the World Bureau of Metal Statistics (WBMS). It produced 842,100 tonnes of SX-EW copper cathodes during the year.

With a designated 120,000 tonne-per-year copper capacity, the amount of copper concentrates required by LCS would be close to 500,000 tonnes, a company source said.

“LCS would not be able to treat all DRC concentrate output,” the source added.

“Many mines are located far away from LCS with transport routes that don’t work, or work for low volumes,” a fourth source said.

Up to 100,000 tonnes of copper in concentrates in DRC would not be going to the furnace of LCS, the source estimated.

“If exports are banned, these [100,000 tonnes] just won’t be produced, and taxes and royalties won’t be paid,” the source said.

Zambian smelters hit
A strict implementation of the export ban on DRC concentrate will hit copper smelters in Zambia the hardest.

Currently, DRC copper concentrate exports make up an important part of supply to neighboring Zambia, home to First Quantum’s Kansanshi, KCM’s Nchange and CNMC’s Chambishi smelters.

DRC copper ores made up 6.1% of total imports in Zambia for June 2020, government data showed.

Part of the concentrate output from Frontier and Sicomines mines in the DRC are sold to Zambian smelters.

DRC miners are still lobbying to change the government’s mind, according to multiple producer sources who shared some optimism in getting allowance for concentrate exports.

“The situation is very fluid and could change back. The government often threatened this kind of thing and it worked itself out,” a fifth source said.

“The way I see it, there could be still some room for consideration, let’s wait and see,” the first source said.

It is uncertain whether the export waivers will continue to be granted for cobalt concentrate, which was included in the 2013 ban.

DRC is also the world’s biggest producer of cobalt, a key ingredient in batteries for electric vehicles, which are touted to replace the internal combustion engine. China is the biggest buyer of DRC-origin cobalt ore and concentrate.

Additional reporting by Andrea Hotter in New York.

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