Cobalt mine sales halt to push up price of key electric car metal
A sales halt at one of the world’s largest cobalt mines is set to push up prices of the metal whose demand has surged in recent years with the advent of electric cars.
The Glencore-run mine, located in the Democratic Republic of Congo, ceased sales on Tuesday after it found traces of the nuclear fuel uranium on the site.
Katanga Mining, a unit of Glencore that was set to become the largest source of cobalt in the world next year, said the amount of uranium had exceeded the limit allowed to truck cobalt out of the DRC to the port, though it added that it did not pose a health risk.
Cobalt prices have fallen this year due to the growth of mine supply in the DRC, which produces more than 60 per cent of the world’s supply of the metal. However, demand is set to double over the next few years due to its use in lithium-ion batteries in electric cars.
“It will be a concern to auto manufacturers who haven’t yet locked in supply for next year,” Caspar Rawles, an analyst at consultancy Benchmark Minerals Intelligence, said. Carmakers such as Tesla are reducing the amount of cobalt they use in their batteries, but eliminating it entirely is proving difficult due to safety issues.
Cobalt plays a key role in providing stability to the battery, allowing it to be charged and discharged continually without problems. Switzerland-based Glencore is the world’s largest producer of cobalt, which is mined alongside copper at its Katanga and Mutanda mines in the DRC, and as a byproduct of its nickel mines in New Caledonia, Canada and Australia.
The halt in sales from Katanga comes just as big cobalt producers such as Glencore are negotiating supply contracts with buyers in China, at a conference in that nation’s eastern city of Xiamen this week.
Many buyers in China have held off purchases this year, in the anticipation of lower prices, Mr Rawles said. Any restocking could have a significant impact on the price of cobalt, he added.
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