Eurasian Resources Group fears that its plan to become one of the world’s largest cobalt producers with its operation in the Democratic Republic of Congo could be threatened by a shortage of electricity, its CEO Benedikt Sobotka told CNBC Africa on Wednesday.
The Luxembourg-based international miner is spending up to $1 billion over the next two years ramping up production of 300,000 mt/yr of copper and 20,000 mt/yr of cobalt at its RTR operation, that employs around 10,000 people. The project is backed by Chinese investors and the cobalt will go to power the batteries and smartphones of the world; much of it may end up in Tesla’s new Powerwall batteries created by South African-born billionaire Elon Musk.
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The problem for ERG is that climate change has meant low rainfall cutting back power production by the hydro-electric dams in the DRC and neighbouring Zambia. ERG had already suffered cuts in production because of a lack of power.
“Our greatest difficulty is the power situation in Southern Africa. We need about 180 MW for our operations in Africa and that will increase to 300 MW and we don’t know where that power is going to come from,” Sobotka said fearing a cut back in investment in the future.
“I think that is a realistic risk. I think we will probably see in the next couple of years how the situation will play out in Zambia that appears the most vulnerable in terms of climate change.”
ERG is trying to invest in a power plant in Mozambique that will supply the DRC operations by cable.