Why Cobalt has always been DRC and Zambia’s blue Gold
Did you know that DRC is the world’s largest producer of Cobalt accounting for 65% of global production? Did you also know that Zambia is in the top 10 global producers accounting for 2.5%? DRC and Zambia are Africa's top copper hotspots accounting for close to 17% of the worlds red metal too. A by- product of red metal mining is cobalt which is getting metal traders excited in London as it trades at a price 10 times that of copper on the LME. See Bloomberg graph below showing Cobalt rally.
Pricing on the London Metal Exchange
This bullish roar was fueled by the electric car era were car makers seek to deviate from using carbon fuel in the name of clean energy. Cobalt is used in battery manufacture. 2017 saw its price rally over 139% to $78,800/mt levels not seen in a decade because metal traders have priced-in a rise in demand for the metal.
Zambia and DRC Mines
DRC and Zambian mines have cobalt mines which the ministry of mines needs to revisit ‘mining declarations’ by mining entities that constantly declare copper because it is in the copper extraction that cobalt resides. For all we know the by-product quantum could sell for more than the copper mined. Zambia’s Copper production rose 14% to 852,7456/mt in 2017 and that of DRC 6% to 1.09mln mt. The rationale is that if copper production rally’s so should the bye product - cobalt.
DRCs chamber of mines at the mining indaba in Cape Town said cobalt rose 15.5% to 73,940mt which Gecamines seek greater control of by engaging directly with car/battery makers. A common factor for the both nations is that they don’t tangibly benefit from the good copper and cobalt prices.
The cobalt rally could be signalling battery manufacturing opportunities in both DRC and Zambia.
Cobalt is Zambia and DRCs blue gold!