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General Market Commentary
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General Energy
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General Market Commentary
Cobalt price: Congo ebola outbreak compounds acute supply fears
The price of cobalt has been drifting after hitting near 10-year peaks in March to exchange hands for $91,000 a tonne on Friday.
Cobalt is still up nearly fourfold since hitting multi-year lows at the beginning of 2016 as worries about supply of the metal, a crucial element in batteries, combine with expectations of booming demand from the electric vehicle sector.
Supply risks for cobalt are centred on the Democratic Republic of the Congo which is responsible for nearly two-thirds of world output. And the country’s share will only increase over the next five years (see chart).
Fears of disruption from the conflict ridden central African country has intensified after an outbreak of the deadly ebola disease and the possibility of a return to civil war in the run up to long-postponed national election now set for December.
On Friday, the world health organization raised the the DRC's ebola health assessment risk to "very high."
"The risk of international spread is particularly high since the city of Mbandaka [population 1.2m] is in proximity to the Congo river, which has significant regional traffic across porous borders," the WHO said in a statement noted.
Source: Reuters
On Sunday, the DRC recorded its 26th death in the northwest Equateur province. The disease is named after the Ebola river in the country.
Glencore quandary
Troubles are also mounting for top cobalt producer Glencore.
The Swiss commodities giant is in a bitter fight with its former partner in the DRC, Dan Gertler, who is seeking up to $3 billion in unpaid and future royalties.
The Israeli businessman, under sanctions from the US Treasury dept over allegations of bribery, is a close confidant of DRC president Joseph Kabila, in power since 2001.
It was also reported on Friday that Britain’s Serious Fraud Office is planning to open a formal bribery investigation into the company’s dealing with Gertler.