The global cobalt supply chain remains geographically concentrated — in the Democratic Republic of Congo (DRC) for mine production and China for refining — which will likely pose procurement challenges for battery manufacturers, market analyst Fitch Solutions finds in its latest industry report.
However, Fitch notes that there is currently a solid global project pipeline, due to the rise in cobalt prices and the expected demand boom amidst battery manufacturing projects, which will aim to diversify, to some extent, production channels.
Click here for an interactive cobalt price chart.
Cobalt is primarily the byproduct of nickel and copper mining, and the global cobalt industry is set to receive a significant boost from the worldwide shift to a green economy, as the metal is a key component of rechargeable batteries due to its stability and anti-corrosion and high-temperature resistance characteristics.
The battery revolution will increasingly dictate cobalt production trends, Fitch says, with most of global refined cobalt being converted to chemical forms that are used in rechargeable batteries as opposed to cobalt metal that is mainly used in other industries.
While currently there is no chemical refining of cobalt in the Americas, there are refineries producing cobalt metal. In Canada, Vale produces refined cobalt metal at its Port Colborne refinery in Ontario, while Sherritt and General Nickel Cooperate a joint venture refinery in Alberta that produces refined cobalt metal in powder and briquette form.
Looking to the future of supply, Fitch has compiled a list of the top 10 cobalt operations outside China and the DRC.
Sumitomo takes the top spot, producing an estimated 6,000 tonnes of metal and chloride from its mine in the Philippines, and refined in Japan. Vale is in second place with 4,700 tonnes produced at New Caledonia and Canada and refined at its Sudbury operations. Third place goes to Russian miner Nornickel, producing 4,600 tonnes of metal and intermediates from its Kola division.
Swiss commodities Glencore giant owns two operations in the top ten with 4,400 tonnes of metal produced from mines in Western Australia and Canada and refined in Norway, and 3,300 tonnes mined and refined at its Australia operations.
Sherritt International and General Nickel’s MOA JV is in sixth place with 3,300 tonnes of metals mined in Cuba and refined at its refinery in Fort Saskatchewan, Canada. MCC is in seventh place with 3,000 tonnes of intermediates mined in Papua New Guinea and Cengiz Holding in eighth place with 2,700 tonnes of intermediates mined and refined in Turkey.
Rounding out Fitch’s top ten are Cubaniquel with 2,000 tonnes of concentrates mined in Cuba and Ambatovy, with 1,900 tonnes of metal mined and refined in Madagascar.
(Read the full report here)