Wednesday, March 28, 2018

"A Little-Known Cobalt Miner Wants to Out-Produce Everyone Except Glencore"

Little known, waddya talkin.?

From Bloomberg, March 26:
  • Closely held Chemaf plans to compete with biggest producers
  • Congo accounted for two-thirds of global supply in 2017
A little-known cobalt miner in the Democratic Republic of Congo plans to ramp up output so fast it will soon be out-produced only by industry leader Glencore Plc.

Chemaf Sarl, a closely held Lubumbashi-based company, and several other firms are capitalizing on a boom in demand that’s transforming small copper miners into major cobalt players, as refiners and automakers scramble to secure long-term supplies. Prices for the metal, used to make rechargeable batteries in electric vehicles, have more than tripled in the past two years.

New output from Congo means the supply of cobalt could exceed demand for a few years, as it did narrowly in 2017, Guildford, U.K.-based metals trader Darton Commodities Ltd. said 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 are 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 tons of cobalt a year, Chairman Shiraz Virji said by email. Added to output from its existing Etoile mine, which was about 5,000 tons last year, that could make Chemaf the world’s second-largest producer.

Global Heavyweight
Congo dominates output of the metal. Last year, the central African nation produced two-thirds of global supply, or 81,000 tons, according to Darton. Half of that amount came from the country’s two largest copper mines: China Molybdenum Co.-controlled Tenke Fungurume Mining and Glencore-owned Mutanda Mining.

The predicted rise in electric-vehicle production will require annual cobalt production of 314,000 tons by 2030, Glencore Chief Executive Officer Ivan Glasenberg said in December.

Congo’s market share is set to climb in coming years as both 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 Ltd., which restarted production in December after a two-year hiatus. Katanga’s output will be as much as 34,000 tons a year from 2019, according to the Swiss commodity giant, making it the world’s largest cobalt mine.

ERG, Pengxin
Other miners also expect to start producing soon. Luxembourg-based Eurasian Resources Group Sarl’s Metalkol Roan Tailings Reclamation project is set to begin output later this year, eventually reaching a capacity of 21,000 tons a year. Shanghai-based Pengxin International Mining Co.’s Shituru Mining will also open a plant at the end of this year where capacity will reach 7,000 tons annually, according to a stock market filing....MORE