Glencore’s Kamoto Copper Company is facing a €800 million royalty dispute with Congolese tax authority DGRAD, which has led to the freezing of bank accounts and temporary closure of storage facilities. Efforts to resolve the matter have so far been unsuccessful. Despite the ongoing conflict, copper and cobalt production remains stable, with KCC having paid substantial taxes and royalties to the government in the past.
A dispute over royalty payments has erupted between the Kamoto Copper Company (KCC), a subsidiary of Glencore, and the Congolese government, specifically the tax authority known as DGRAD. DGRAD claims that KCC owes the state over €800 million ($894 million). This situation escalated earlier this year when the company’s local bank accounts were frozen, leading to tax agents briefly sealing a warehouse used for storing copper and cobalt. Fortunately, operations resumed the following day, and copper and cobalt production has not been impacted. Kamoto is a major operation in the region, producing substantial quantities of both metals. Despite this disagreement, KCC reportedly paid $2.3 billion in taxes and royalties to the Congolese government from 2021 to 2023, highlighting the complexities of the relationship between local authorities and mining companies.
The Democratic Republic of Congo has emerged as a significant player in the global mining sector, recently surpassing Peru to become the world’s second-largest copper producer, while also being the largest source of cobalt. This status is increasingly critical to global industries, particularly due to the global push for green energy sources. The conflict involving Kamoto Copper Company highlights the often-contentious relationship between foreign mining corporations and national governments regarding tax obligations and royalties, which can lead to operational interruptions and financial disputes.
The ongoing royalty dispute between Glencore’s Kamoto Copper Company and the Congolese tax authority underscores the challenging landscape of mining operations in the DRC, where significant financial stakes and regulatory demands intersect. As production continues unaffected, the outcome of this dispute may influence future investment and operational strategies in the region.
Original Source: www.miningweekly.com
