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Congo hikes lithium royalties, triples tax burden

Bloomberg Markets •
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Kinshasa confirmed that lithium will join a short list of minerals now classified as strategic, moving the metal into a higher tax bracket. The change follows a cabinet decision to broaden the strategic minerals roster, a move aimed at capturing more state revenue from fast‑growing commodities. Investors in Congolese mining firms will see cost structures shift immediately this year.

Under the new regime, royalty rates on lithium extraction could rise threefold, effectively triple royalty payments to the treasury. Existing operators must renegotiate contracts to reflect the higher levy, while prospective projects face tighter economics. The policy signals Democratic Republic of Congo’s intent to leverage the metal’s surge in global demand as electric‑vehicle batteries drive prices upward in the next year for investors overall.

The tax shift will likely compress margins for companies like Gemcorp Mining, which operates several Congolese lithium concessions, and could deter new entrants without deep pockets. Analysts warn that higher royalties may push production costs above spot prices, prompting firms to explore joint ventures or shift focus to less‑taxed minerals. The move reshapes the country’s resource‑revenue outlook for the fiscal year.