Eurasian Resources Group enters into a principal agreement with China?s NFC to complete the construction of its project in Africa; EXIM and ICBC to support the financing, Sinosure to provide the insurance
Eurasian Resources Groups seeks to end child labour in Africa’s mines (transcript of Mr Sobotka's interview with CNBC in Davos)
Interviewer: Let’s get into what’s been happening here: a lot of deals are been signed here at the World Economic Forum, and if not deals being signed, we have a lot of conservations on what we should anticipate in 2017. Now we’ll try and get through as much as possible with Benedikt Sobotka, CEO of Eurasian Resources Group. Now according to what’s been happening, you have put a lot of things, a lot of pen to paper with what’s been happening here. One of the key issues has been Good Shepherd implementing, of course, a project in Lualaba in the DRC. You’ll break this down and then we’ll get into a lot more. What do you see about the prospects, first in this and then in a lot more engagements that that you have?
Mr Sobotka: First, for us Africa is incredibly important: it’s one of our largest regions. We employ almost 15,000 people in the region, directly and through contractors, and, in some of our regions, we’re by the far the biggest employer. We produce copper and cobalt, we are one of the largest producers of cobalt. And the deal that you were referring to earlier, I wouldn’t call it a deal but it’s a partnership agreement that we would like to support further, is with an organisation that supports the end of child labour and the development of alternative livelihoods in some of the very fragile communities that we operate in. As many of you will know, the DRC and other Central African countries have a lot of artisanal miners, small scale miners, that live in very difficult conditions and child labour is a dominant problem there that we are trying to address.
Interviewer: Now of course the Dodd Frank Act, when it came into play, caused a lot of creation and a lot of disruption with a lot of business models. We saw the traceability being implemented in East Africa, but just give us a sense of how the ecosystem is slowly rebuilding into a more revenue based model?
Mr Sobotka: Well, I’m actually – you mention Dodd Frank – I’m actually concerned because I can see that with the new administration coming this will go backwards, so we might see less control and compliance in the region than we would like to. And still, a lot of the commodities that we operate in are not covered by this legislation and, in some of the countries that we operate in, they struggle to enforce the law - that’s pretty consistent across the board. But artisanal mining in general is a problem that in the 21st century shouldn’t exist. We should have abolished it and we should have found ways to employ workers and include them into the value chains more effectively. And that’s one of our priorities for the next years going ahead, and particularly of course with the abolition of child labour, which is just impossible to exist in the 21st century.
Interviewer: There are a lot of conversations that we need to have on the same, but, apart from the DRC, you’ve mentioned that there’s a lot more work happening. Still in the African context, we’d like to understand how it is trying to contextualize your business across different areas with very different working or conducive environments.
M Sobotka: Working in Africa, and particularly with the commodities that we produce - cobalt is a good example, I mean, cobalt is in every single mobile phone you touch, it’s in all of your Tesla cars and your electric vehicles so that you can’t do without it - 60% - 70% of the world’s battery grade cobalt comes from Central Africa. And I think that’s an opportunity, I mean it’s like the Saudi Arabia for cobalt is in the Congo, but it doesn’t see the benefits of having such a geologically dominant position in that industry and so a lot more needs to be done.
Interviewer: Well, what about your business in the same because, I mean, apart from DRC it stems out across further. Have you seen any disruption with what you’re trying to achieve and what’s actually on the ground?
Mr Sobotka: We have great plans for Africa, not just in the Congo but also in Zambia and in Mozambique, where we’re planning to build a large power plant. Power is a historic challenge in Africa as clearly there’s a lack of infrastructure: the majority of the power infrastructure is in South Africa and a lot more development needs to happen in power. It is not just the base load power that you need - from big power plants to hydropower and coal fired power stations - but you need a lot of distributed energy solutions. There are some very good startups in that space but the big corporations need to do more. I mean the startups that we have worked with include a company called EPS, a very very smart company that looks at smart grids and mono grids for distributed energy, because the continent is just too large to be covered in a very short time with the kind of infrastructure that you need and that you would have in Europe and the United States.
Interviewer: Alright, the studio says that we have to wrap up but thank you for that.