Demand for cobalt is rising globally because of its use in electric vehicle batteries.
As such, China Molybdenum (CMOC) is planning to invest U.S. $2.51 billion to further augment output from its Tenke Fungurume mine in the Democratic Republic of the Congo (DRC), Reuters reported, citing the company’s announcement.
China Molybdenum to make $2.5B investment in DRC
CMOC is the second-largest global cobalt feedstock producer after Switzerland’s Glencore. Its TFM mine produced 15,400 tons of cobalt and 182,600 tons of copper in 2020.
The new project will come up at its Tenke Fungurume copper-cobalt mine (TFM) in the Congo. China Molybdenum has an 80% stake in Tenke Fungurume, one of the world’s largest copper-cobalt deposits. The DRC’s Gecamines owns 20%.
News agency Reuters reported the Chinese firm had stated in a filing that the investment will go toward building three ore production lines. As a result, average annual copper output at the mine would rise by 200,000 tons. In addition, cobalt output would rise by 17,000 tons.
The company expects to complete the project and put into production in 2023.
TFM has copper resources of 24.9 million tons and cobalt resources of 2.5 million tons. In 2016, CMOC acquired the mine from U.S.-based base metals mining firm Freeport-McMoRan.
According to a statement put out earlier by the company, the TFM mine had started trial production on July 16 this year.
“In Q1 2021, the Company completed investment of RMB684 million in capital projects, up 37% year-on-year, including in the expansion projects both at TFM in the DRC and NPM in Australia that are planned to be put into production in Q2, upon completion of which further release of production capacity and continued efforts in cost optimization will render the Company a better position to capture the upsides in metal prices and achieve stronger profitability,” China Moly said in its Q1 2021 results report.
Currently trading at around U.S. $50,000 a ton, cobalt is a critical component in electric vehicle batteries. EV sales will likely continue to rise in the coming years as the world strives to reduce carbon emissions.
A world leader in cobalt production, the DRC has created an entity called EGC to buy artisanal cobalt from the country’s miners and sell it to unregulated middlemen.
Cobalt prices have been volatile and hit decade highs of nearly U.S. $100,000 a ton in 2018 (almost double the current price).
The battery materials market has been growing at a rapid pace over the last few years.
The increase in the usage of lead-acid and lithium-ion (Li-ion) batteries, plus a surge in demand from the consumer electronics and automotive industries, are some of the major driving factors of the global battery material market.
According to Allied Market Research, the global battery material market is expected to reach $80.5 billion by 2030, registering a CAGR of 5.9% from 2021 to 2030.