In a note published early on 4 February 2020, Glencore released production figures for 2019. Highlights included an increase in cobalt production and a fall in copper production. Cobalt production increased by 10% between 2018 and 2019 to 46.3kt. This increase was a result of higher output from the Katanga mine, a noteworthy trend given that copper and cobalt production have now ceased at the company’s Mutanda mine. Copper production, however, fell by 6% over the same period, with almost 50% of this decline due to reduced production from operations in the DRC and Zambia.
Glencore is the world’s largest cobalt miner, producing approximately 32% of total world supply in 2019. Around 90% of Glencore’s cobalt supply comes from the DRC, with the balance from Australia and Canada. The DRC is, in turn, the world’s largest supplier of mined cobalt, accounting for around 70% of global production in 2019.
The production increase at Katanga is a result of a variety of on-going projects aimed at debottlenecking the operation. The completion date for the project is H2, 2020.
In 2019, Glencore had suspended the sale and export off cobalt concentrates due to unacceptably high levels of uranium in the cobalt hydroxide. The sale and shipping of a limited quantity of concentrate, in line with radiation guidelines, resumed in April. Proposed measures to deal with the deleterious levels of uranium include construction of an ion exchange plant. Studies on this are on-going with results expected in the latter half of the year.
Glencore also owns and operates the Mutanda mine in the DRC which was placed on care and maintenance in November 2019. The closure followed a fall in cobalt prices. Previously, many cobalt miners had expanded their capacities, hoping to capitalise on higher cobalt prices brought on by the anticipation of EV uptake worldwide. As this EV-based demand has failed to materialise, however, miners have found themselves in a market of oversupply and increasingly tighter margins.
At present, the remaining mine life of Mutanda is 20 years, subject to positive outcomes of on-going feasibility studies. With cobalt prices still currently depressed, however, Roskill assumes the earliest possible re-start of the Mutanda mine to be circa 2022.
Roskill’s Cobalt: Outlook to 2029 report was published in August 2019. Click here to download the brochure and sample pages for the report, or to access further information.