DRC's KCC Sealed and Production Halted by Tax Authorities!

On July 10, local media in the DRC reported that the country's Directorate General of Taxes (DGI) on July 9 sealed the offices and some facilities of Kamoto Copper Company (KCC) in Kolwezi, Lualaba Province. DGI stated that KCC was involved in unpaid taxes amounting to nearly $3 billion. The sealing action led to the evacuation of some personnel and temporarily disrupted copper and cobalt production at the relevant sites; the scope and duration of the sealing, as well as its actual impact on the mine and smelting system, remain to be further confirmed.

Local media, citing sources close to the case, reported that tax authorities and relevant companies under Glencore had been in negotiations over this dispute for nearly 12 months prior. DGI allegedly questioned that the relevant enterprises had understated transfer prices in export transactions of ore products and shifted part of the value to overseas affiliated entities; Glencore denied the tax authority's assessment, calling the claims "completely unfounded." Therefore, the approximately $3 billion remains the amount sought by the DRC tax authorities and has not been finally determined by the judiciary.

Public information shows that KCC is a major copper-cobalt project controlled by Glencore, with main products including copper cathode and cobalt hydroxide. According to SMM, KCC's copper cathode production has averaged around 190,000 mt per year in the past two years. If the sealing measures persist and materially affect production or product shipments, it is expected to cause periodic disruptions to the DRC's copper and cobalt supply. Subsequent attention should focus on the recovery of KCC's operations and progress in resolving the tax dispute.