Glencore Chief warns Carmakers of Cobalt Supply Crunch -

“The Chinese will have most of the offtake of cobalt. They’re not going to sell batteries to the world, more than likely they’ll produce batteries in China and sell electric vehicles to the world,” Mr. Glasenberg told the conference. Cobalt prices have more than doubled over the past year to their highest level since 2008 because of rising demand from electric carmakers.

About 10 kilogrammes of cobalt is used in an electric car battery, more than 1,000 times the amount used in an iPhone, according to BMO Capital Markets. Glencore is facing a fivefold rise in the royalty it has to pay to the DRC government on cobalt under a mining code signed this month by president Joseph Kabila. Glencore would have no qualms about selling its copper and cobalt assets to a Chinese buyer if they offer a high enough price, said Mr. Glasenberg.

The company has invested $7bn in the resource-rich country based on the provisions in the 2002 mining code, said Mr. Glasenberg.

“They may come with a number that blows the lights out. If we get that number, I’ve got to look after shareholders. I’m not here to look after the world politics, so we would sell it, yes,” he said. Mr. Glasenberg also said the global copper market could face a supply “crunch” over the next few years as there are no new mines being built.

“There’s not much new tonnes if you add it up. There’s no new big tonnes coming on the market,” he said. “Provided demand is there and China doesn’t crack……”

Speaking on another of Glencore’s key commodities, coal, Mr. Glasenberg said developing countries in south-east Asia will continue to use the fuel as a power source. Glencore agreed to buy Rio Tinto’s Hail Creek coal mine in Australia for $1.7bn.

“They are building a lot more coal-fired stations, these are the cheapest form of energy production in the world,” said Mr. Glasenberg. “Poorer impoverished nations have no alternatives; they are going to burn coal.”