What Does Glencore Have To Do With Congo’s Elections?
Decision by the world’s largest commodities trader, Glencore, to suspend mining of copper and cobalt could complicate election in the Democratic Republic of Congo (DRC), the largest producer of the two minerals.
According to a Reuters report, Glencore’s decision would cost the DRC government about $216 million, which will make it harder for the mineral rich African country to pay for regional, national and presidential elections set for November 2016.
DRC’s electoral body estimates that election will cost more than $1.1 billion, making it one of the most expensive voting process in sub-Sahara Africa.
Switzerland-based commodities supplier Glencore, whose shares have plunged 69 percent this year due to falling commodity prices, announced in September it will suspend copper and cobalt output at Congo’s Katanga mine and Zambia’s Mopani mine for one and a half years to build new processing facilities that will cut output costs.
Katanga Mining accounted for 15 percent of copper production in Congo last year and employs more than 5,000 people. As much as a fifth of Katanga’s workforce may be fired, the firm said on September 11.
Gécamines, Congo’s state-owned mining company, said it supported Glencore’s decision to suspend output at the Katanga mine.
“If Glencore feels that this is the best way to bring the mine back to profit, then we are confident in their decision,” BDlive quoted Arthur Katalayi, senior executive adviser to Gecamines chairman Albert Yuma, saying.
Apart from the expected cash crunch due to Glencores production halt, DRC is facing a volatile political environment with the opposition fighting over President Joseph Kabila’s decision to change the constitution to allow him to run for a third time.