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The North Africa Post: DR Congo to relocate 10,000 families from cobalt-rich region

Article published: Dec 18, 2019

IB Economics syllabus: microeconomics (negative externalities of production)

Authorities in the Democratic Republic of Congo plan to relocate 10,000 families from a town which is rich in cobalt. This is due to the fact that the resource is worth multi-billion dollars, and the town is in the way of mining. According to the governor, “What is under the ground does not belong to the individuals but to the state “which has the power to relocated and compensate the inhabitants.” This is a clear negative externality of production as households (who have absolutely nothing to do with the production or consumption of cobalt) are negatively affected by the spillover costs of production, namely that they have to leave their homes.

Cobalt is used to produce batteries that are used in laptops, smart-phones and electric cars. As global demand is on the increase for battery-powered electric goods, so does the demand for cobalt increase. At the same time, cobalt mining is also linked to child labour (another negative externality), check out this interesting article about the topic by the Financial Times.

Source of image: The North Africa Post

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