DRC cobalt miner takes on titans
A little-known cobalt miner in the Democratic Republic of Congo plans to ramp up output so fast it will soon be outproduced only by industry leader Glencore.
A little-known cobalt miner in the Democratic Republic of Congo (DRC) plans to ramp up output so fast it will soon be out-produced only by industry leader Glencore.
Chemaf Sarl, a closely held Lubumbashi-based company, and several other companies are capitalising on a boom in demand that is transforming small copper miners into leading cobalt players, as refiners and car makers scramble to secure long-term supplies.
Prices for the metal, used to make rechargeable batteries in electric cars, have more than tripled in the past two years.
Fresh output from the DRC means that the supply of cobalt could exceed demand for a few years, as it did narrowly in 2017, UK-based metals trader Darton Commodities commented in a February report.
This surplus will become a deficit when an expected surge in electric-vehicle sales kicks in after 2020 because no new “meaningful” cobalt assets were expected to enter production in that period, according to Darton.
Chemaf is building a processing plant at its Mutoshi mine in Lualaba province that will open in September 2019 and six months later be capable of producing 20,000 metric tonnes of cobalt a year, chairman Shiraz Virji said by e-mail.
Added to output from its existing Etoile mine, which was about 5,000 tonnes in 2017, that could make Chemaf the world’s second largest producer.
The DRC dominates output of the metal. In 2017 the central African nation produced twothirds of global supply, or 81,000 tonnes, according to Darton. Half of that amount came from the country’s two largest copper mines: China Molybdenumcontrolled Tenke Fungurume Mining and Glencore-owned Mutanda Mining.
The predicted rise in electricvehicle production will require annual cobalt production of 314,000 tonnes by 2030, Glencore CEO Ivan Glasenberg said in December. The DRC’s market share is set to climb in coming years as new and upgraded projects come on stream.
Glencore will be responsible for much of the increase after investing in new processing facilities at its Toronto-listed Katanga Mining, which restarted production in December after a two-year hiatus. Katanga’s output will be as much as 34,000 tonnes a year from 2019, according to the Swiss commodity company, making it the world’s largest cobalt mine.
Luxembourg-based Eurasian Resources Group Sarl’s Metalkol Roan Tailings Reclamation project is set to begin output in 2018, eventually reaching a capacity of 21,000 tonnes a year. Shanghai-based Pengxin International Mining’s Shituru Mining will also open a plant at the end of 2018.
Chemaf and Somika Sarl, also based in Lubumbashi, are looking to expand as the global hunger for their deposits drives demand for the formerly unremarkable metal.