Glencore Plc hopes mothballing the world’s largest cobalt mine in the Democratic Republic of Congo will revive prices, but it’s likely to carry a significant political cost.
Mutanda, source of about one-fifth of the metal used to make batteries in mobile phone and electric cars, will stop operations by the end of the year and go into a care and maintenance program. That’s a disaster for the economy in one of Africa’s poorest countries, where the mine provides 3,000 jobs to local workers and delivered more than $600 million in taxes last year, more than 10% of the government’s target budget.
The mining giant will try to limit the political fallout by continuing to retain the local workforce and providing training programs. Management said they will also keep funding local hospitals and other corporate and social responsibility projects near the mine. Glencore will also argue the radical plan to manage supply will ultimately benefit the African nation -- supplier of about three-quarters of global cobalt exports -- by reviving prices at the country’s other mines.