Why cost of manufacturing a smartphone will rise
The cost of manufacturing smartphones is set to rise following the decision by the Democratic Republic of Congo (DR Congo) to raise taxes on the exportation of cobalt, coltan and germanium, all major minerals used in the making of mobile handsets and electric cars.
The move by DR Congo, which is the world’s largest producer of cobalt, comes as the country seeks to recoup more money from the highly sought-after minerals amid rising demand.
Royalty payments on cobalt and coltan were previously 3.5 percent but have now been increased to 10 percent in the new decree.
Cobalt forms a major component of lithium-ion batteries used in smartphones and electric cars and Smartphone giants Apple and Samsung have already moved to secure long-term cobalt supply from the West African country.
DRC Prime Minister Bruno Tshibala and Mines Minister Martin Kabwelulu declared Cobalt a “strategic mineral resource” on November 24.
The government singled out the three minerals because of their numerous applications in high-tech industries and the “current international economic conjuncture,” according to the decree.
Coltan is used primarily for the production of tantalum capacitors, used in many electronic devices.
Many sources mention coltan’s importance in the production of mobile phones, but tantalum capacitors are used in almost every kind of electronic device.
Germanium is used to make transistors for use in electronic devices. Germanium is also used to create alloys and as a phosphor in fluorescent lamps.
Increasing taxes suggests DR Congo is seeking an even larger slice of revenues earned from the ongoing boom amid allegations that most much of the country’s mining revenues end up in private pockets.
Last July the British NGO Global Witness described the mining sector as the regime’s “cash machine” and its revenues were being wasted by a “toxic combination of corruption and mismanagement”.