Cobalt production is expected to remain suspended at the Lubumbashi operation in the Democratic Republic of the Congo until at least 2020 due to two international court proceedings against state miner Gecamines SA, Bloomberg News reported Nov. 27, citing two anonymous sources.
The DRC accounts for roughly two-thirds of global cobalt supplies, with about 4% of global supply coming from GTL, according to the report.
GTL, a 70/30 joint venture between Groupe Forrest International SA and Gecamines, is suing Gecamines in the commercial court in Brussels for damages, after Gecamines blocked GTL's access to the mine in March in an attempt to switch partners.
After blocking GTL, Gecamines brought in Shamrock Global Inc., which petitioned the International Court of Arbitration in early November to determine whether Gecamines breached a July 2016 deal to grant Shamrock access to Lubumbashi after the GTL contract ended.
GTL failed twice between March and July to secure a temporary verdict from the Belgian court to regain access to the mine waste, and its furnace was idled for five months.
Henry de Harenne, a Groupe Forrest spokesperson, confirmed that proceedings are ongoing without going into details, while Gecamines said the dispute is focused on the interpretation and execution of contractual agreements signed between the parties in 1997.
Under the 1997 agreement with Gecamines, GTL was entitled to process Lubumbashi waste to produce up to 5,000 tonnes of cobalt per year for about 15 years. The contract was revised in January 2013, and according to Groupe Forrest's interpretation, the amendment entitles GTL to continue processing cobalt at the same rate until the resource is completely depleted.
However, Gecamines said in December 2016 that GTL had already gone over its waste dump processing quota to produce 75,000 tonnes of cobalt, while GTL maintains it produced less than 65,000 tonnes and there was no production limit in the amended contract.
GTL also opposes Shamrock's claim on the tailings, saying it has pre-emptive rights to the parts of the site it was not already exploiting.
Shamrock CEO James McCormack said a ruling by the Paris arbitration court in favor of the company may see Gecamines halting any contract negotiations and or settlement agreements regarding the waste material, pending the outcome of the main arbitration hearing between Shamrock and Gecamines.
From late 2016 through mid-2017, cobalt prices rose from between US$20,000/t and $30,000/t to over US$60,000/t in 2017, according to S&P Global Market Intelligence.
