Fortune Minerals : COBALT NEWS

Unknown - February 18, 2021

The growing adoption of electric vehicles (EVs) is driving the increasing demand for lithium, nickel and cobalt - critical metals used as cathode materials for lithium-ion batteries in the automotive, energy and electronics industries.

Cobalt is vital for boosting the energy density and life of lithium-ion batteries, and its thermal stability prevents batteries from overheating and potentially catching fire…Although several EV manufacturers, most notably Tesla, have announced their intention to reduce or eliminate cobalt from battery cathodes because of its scarcity and cost and ethical concerns around mining cobalt, Roskill Senior Analyst Brian Ziswa expects demand for the blue metal to more than double over the next decade. …'We expect to see demand for cobalt to grow from 136,100 tonnes in 2020 at an average growth rate of 6.8% per year to 280,000 tonnes by 2030,' Ziswa said. 'The expected growth in demand is mainly from its use in batteries for the automotive and portable electronics sectors, which accounted for 56.6% of total cobalt demand in 2020 and is forecast to reach 70% by 2030.'..Supply will come from expansions in existing operations, restarts of operations on care and maintenance, and the commissioning and ramp-up of greenfield projects. The analyst forecasts that existing operations will account for 183,000 tonnes of cobalt in 2030, of which more than 124,000 tonnes will come from mines in the Democratic Republic of the Congo (DRC)…Outside of the DRC, much of the mine supply growth will come from Indonesia, where cobalt resources are abundant, he said. These resources are being developed by mining companies like PT Halmahera Persada Lygend at its High Pressure Acid Leach (HPAL) operation in Obi, which is expected to commence commercial-scale production by the middle of the year…Over a dozen cobalt projects are also under development in Australia, Zambia, and Canada… 'Cobalt mine capacity has increased significantly in the past three years in the DRC, mainly due to restarts and the ramp-up of some large-scale cobalt mining operations including the Katanga and Mutanda mines,' he said…Should planned expansions at Glencore's Katanga mine, China Molybdenum Company's Tenke Fungurume mine, and Eurasian Resources Group's Metalkol Roan Tailings Reclamation project in the DRC proceed, then the combined operational capacity could reach 96,800 tonnes of cobalt by the mid-2020s, Ziswa said…Glencore's Mutanda, the world's largest cobalt mine, was mothballed in late 2019 due to low cobalt prices and market demand. Although Glencore is working on a feasibility study of the mine's sulphide orebody, Ziswa said that cobalt prices will determine any restart of the mine…'There are also at least 18,000 tonnes per day of cobalt capacity from artisanal-mined cobalt in the DRC,' he said…'While the move towards a more regulated and state-controlled ASM cobalt sector could be essential to build up a more sustainable supply chain, it could also potentially impact the production output from this sector, with around 10,000 tonnes of the total global cobalt output in 2030 expected to come from ASM operations in the DRC,' Ziswa said…He noted that ASM is a 'fairweather' activity, with production from these operations dependent on strong cobalt metal prices…Ziswa said that although cobalt prices briefly rebounded after Glencore mothballed Mutanda in 2019, prices fell to a 10-month low of US$12.90 per lb. in mid-2020. But rising demand and the tightening in both feedstock and refined markets between 2021-2022 should support a strong recovery in prices…The continuing absence of production from Mutanda could lead to a supply deficit emerging starting in the mid-2020s. This could require a restart of Mutanda and the commissioning of new projects to keep the market in balance and might bring about a spike in the cobalt price to US$22 per lb., from the current US$21 per lb., which he said could incentivize new supply.