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PxPx007on Jul 05, 2013 4:13pm
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We will have our answer maybe next week ... a tax increase more likely than copper ban
We will have our answer maybe next week ... a tax increase more likely than copper banDRC mulls doubling export tax on cobalt to $120 per tonne
July 05, 2013 - 13:15 GMT Location: London
KEYWORDS:Democratic Republic of Congo , cobalt
The Democratic Republic of Congo (DRC) may increase the tax on exports of cobalt concentrates, perhaps to as much as $120 per tonne, or double the current rate, market sources told Metal Bulletin.
Earlier this year, the DRC government said it would impose a ban of exports of cobalt and copper concentrates, but now the talk is of doubling the current export tax, which was first imposed in 2010, one source in the country said.
In an interview with Metal Bulletin last month, an official in the DRC’s mining ministry hinted that the country was likely to be flexible on the export ban.
Two other sources active in the country said that they expected confirmation that an increase on the current tax of $60 per tonne – which the DRC government imposed to encourage beneficiation – could be confirmed as soon as next week.
“The impact could be to make the cobalt contained in concentrates 50-75 cents per lb more expensive,” a source with close links to China said.
He cautioned that while he believes the increase in the tax is the most likely option, it has still to be confirmed.
Cobalt is exported from the DRC in a variety of forms, including crushed and washed heterogenite – which has not been through a concentrating process – concentrates, hydroxide and carbonate.
It is not clear how the proposed increase tax would be applied to the different materials or how the increased levy would be imposed on exporters.
Cobalt prices tracked by Metal Bulletin have moved up by almost a quarter since the start of April, to $13.80-15 per lb for low-grade material, in part on anticipation that the market will tighten because of energy restrictions and export restraints in the DRC.
Higher taxes on exports of cobalt-containing material are likely to lead suppliers to attempt to pass the higher costs on to their customers in China, observers noted.
“If we pay it, the customers must pay it,” one source said.