Cobalt prices lean into their ‘blue period’ | World Mining
- Analyst
- Mar 11
- 2 min read
Cobalt prices lean into their ‘blue period’ – World Mining News
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When commodity prices plunge, producers flip off the faucets. The Democratic Republic of Congo, home to three-quarters of the world’s cobalt, has executed the following best factor by slapping a three-month suspension on exports. This is unlikely to reverse the pounding taken by the blue steel.
Cobalt, named for the evil spirits old-time miners took to be accountable for noxious fumes in their ore, is utilized in telephones, jet engines and electric vehicle batteries. Optimism over electric automobiles pushed the price up to about $40 per pound in 2022, giving a good experience to miners akin to London-listed Glencore, which ruled the roost till being elbowed apart by China’s CMOC in 2023.
Naturally, provide boomed. As a byproduct of copper mining, manufacturing of cobalt rose alongside growing manufacturing of the pink steel. CMOC deployed the low price, high quantity China playbook with aplomb, growing manufacturing to the tune of 114,000 tons last 12 months. That left Glencore effectively behind and vaulted CMOC’s own steering of 60,000-70,000 tons. This 12 months — pre-export halt — it’s guiding for up to 120,000.
Cobalt stockpiles have additionally risen. In December, warehouses had been holding 128 metric tons, in line with the US Geological Survey, a lot of it seemingly in China.
Low prices, now round one-quarter of the 2022 peak, haven’t put the brake on CMOC’s ambitions. This is a low-cost operator and the incremental price of producing cobalt alongside copper is small. And suppose of CMOC as a vertically built-in behemoth. Major shareholder CATL is the world’s largest producer of EV batteries. In addition to its near-25 per cent oblique holding in CMOC, the battery maker additionally took a 25 per cent stake in a single of the mines.
Suspending exports is one of the few levers DR Congo can pull, however it’s a weak one. Enforcement is one motive: borders are porous, and all of the more so when battle with neighbouring Rwanda is raging. Even assuming policing, more mining is approaching stream, together with in Canada. Indonesia, producing cobalt from nickel, has more capability.
On the demand aspect, applied sciences are altering. Car producers are beginning to change from nickel manganese cobalt batteries to cobalt-free lithium-iron-phosphate (LFP) batteries, which have longer life cycles and fewer environmental points. For now they pack much less energy however as technology improves, more will observe the likes of London electric buses powered by LFP batteries.
That suggests the image is not going to change a lot for DR Congo. History reveals these doing the extracting usually win on the subject of tussles over sources. Extractivism has had a long historical past within the world south; that’s one factor technology has executed nothing to change.
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