(Ecofin Agency) - In the Democratic Republic of Congo (DRC), a law passed in 2017 requires mining companies to employ local subcontracting firms whose majority stake is detained by Congolese nationals. One of the country's main producers of copper and cobalt, Eurasian Resources Group (ERG), is accused of not complying with this measure.

The DRC government has suspended nine subcontractors working in the copper and cobalt mines owned by Eurasian Resources Group (ERG). According to the regulator of subcontracting in the private sector, as reported by Bloomberg on April 4th, the subcontractors were suspended in mid-March due to ERG’s failure to comply with some regulations in place.

Miguel Kashal Katemb, MD of the Regulatory Authority, said ERG must partner with companies predominantly controlled by Congolese nationals, by the prevailing regulations. The Luxembourg-based company asserts that it already does so, but Kashal believes that Congolese individuals at the helm of ERG's subcontractors are shareholders only "on paper; they are not involved in operations, they do not manage the companies."

It should be noted that the production of the Metalkol mine, one of the world's main cobalt mines, and that of the Frontier mine, which delivered over 100,000 tonnes of copper last year, should not be affected by the suspension. ERG has been granted a grace period to find new subcontractors.

The dispute between the regulator and ERG is one of the many between the firm and the Congolese government. In 2023, the Ministry of Mines halted operations at ERG’s Boss Mining copper-cobalt mine, accusing the company of environmental pollution. Also, for some months now, the State company for mines, GECAMINES, has been trying, unsuccessfully so far, to take over some of ERG’s assets.