For too long, the Democratic Republic of Congo has known no competition in the cobalt market, to its detriment. The metal, which used to be just a byproduct of nickel and copper mining, is fast becoming one of the core ingredients of our technology-driven lifestyles. The instability in the DR Congo, however, is driving some investors to look to much smaller but more reliable cobalt sources.
Earlier this year, Canada began to notice the makings of a cobalt rush, starting in the town of Cobalt, Ontario—named for the mineral that was discovered there. More than a century ago, the region was the site of an old-fashioned silver rush, but its resources were soon eclipsed by Africa’s offering. Prospectors are again returning to the town of Cobalt: By May this year, more than a dozen mining companies had staked their claim in the Canadian town, the Northern Prospectors Association told Canada’s CBC .
One of those is First Cobalt, a Toronto mining company. In mid-September, the company said it would be pulling out of DR Congo just months after it signed a deal over copper and cobalt prospecting in the country.
“The DRC remains very appealing geologically but the investment climate has deteriorated since the strategic alliance was announced and we have significantly expanded our footprint in Canada,” the company said in a statement on Sept. 18.
“With the signals we’re getting, why would we invest our scarce dollars in a country that may not respect our investment rights?” First Cobalt CEO Trent Mell told Quartz, saying those questions are better answered in the early stages of the deal.
Without divulging details of why the deal fell apart, Mell said African governments could be rather myopic when it came to policies and mining rights for international prospectors. The world has only recently started paying attention to cobalt, and is only now actively looking for cobalt in new locations like Scandinavia, Russia and of course Canada.
“I don’t think in 10 years the Congo is going to be as significant,” said Mell.
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