Post #121

💡Resource Nationalism Index [ DRC ] In the third chapter ofour "Resource Nationalism Index" series, we take a closer look at the Democratic Republic of Congo, a major copper and gold producer, who has gained fame this year by imposing a 6-month long export ban on cobalt threatening entire global supply. What else makes DRC different from the two countries we have already covered (Mali and Botswana) is the availability of complex system of domestic processing promotion and strict local content requirements. So, what does Resource Nationalism look like in the DRC? 🔸"Process It First" – 7/10 – Intermediate products of copper and cobalt processing are prohivited from export, but due to the physical absence of facilities the rule is often suspended. 🔸 "Share With the State” – 2/10 – No requirement to transfer or sell a share of output to the state on a priority basis, however, the state-run Entreprise Générale du Cobalt wields a monopoly on buying artisanal cobalt. 🔸 “We’re in Too!” – 8/10 – The state has the right for a 10% stake free of charge in the capital of mining companies, which increases by 5% each time a company renews its mining license + another 10% share is reserved for local investors. 🔸 “The Money's Yours, the People Are Ours" – 9/10 – The law requires at least 20% of staff (for management) to be Congolese nationals and ALL subcontractors to be local firms. 🔸“Just Pay Up" – 7/10 – Taxes reach 3.5% for copper and gold 10% for cobalt + extra levies on excessive revenues from commodity sales. 🔸"You Come – You Build" – 2/10 – Companies are obliged to contribute some 0.3% of their revenues to local community development, though even this is often violated. 🔸“We’ll Do It Ourselves” – 8/10 – The state has established a system of tax breaks for invetments in local processing and makes investments itself through the state-owned companies Gécamines, Entreprise Générale du Cobalt and Fonds de Promotion de l’Industrie. 🔸“Come Here, You Bastard!” – 2/10 – The government cannot exercise its authority over mineral deposits in the eastern DRC controlled by rebels, and falls short of eradicating illegal artisanal mining in other parts of the country. The government officials are allegedly involved in illicit mining and exporting. Final score is 5.6 out of 10 — the weak points include the absence of requirements to transfer a part of output to the state, poor enforcement of local community development laws and inability to extend state control to all major deposits. #DRC#ResourceNationalism Devils Below