EXPLORATION AND DISCOVERY: COBALT

The cobalt content of metal concentrates produced in Canada in 1992, as reported in the statistical tables, is 2.2% higher than in 1991. However, the worth of the 1992 production, $136.9 million, is 76.7% more than in 1991. Higher earnings are due to a major price hike for cobalt in 1992 in response to civil unrest in Zaire, the world’s largest cobalt producer.

Inco and Falconbridge both produce cobalt as a by-product of their nickel-copper operations and from purchased concentrates. Inco refines its concentrates in Canada to produce cobalt metal and oxide while Falconbridge sends nickel-cobalt matte to its refinery in Norway. Sherritt Gordon produces refined cobalt at its Alberta refinery from concentrates purchased domestically and abroad. Canadian output of refined cobalt totalled 1,957 tonnes in 1992.

Despite important cuts in the production of nickel and by extension of cobalt by Inco and Falconbridge in 1993, these companies predict refined cobalt outputs similar to 1992. They expect to offset lower domestic mineral production of cobalt by purchasing more concentrates from abroad to produce similar amounts of refined cobalt. Sherritt Gordon, which just completed revamping its cobalt processing system, expects to double its production of refined cobalt to about 1,600 tonnes. This will bring Canada’s total production of refined cobalt to about 2,750 tonnes in 1993.

In 1993, the U.S. Defence Logistics Agency will start selling cobalt from the National Defence Stockpile Center. Because it is not top-quality material (hence it has limited use) market observers expect this material to sell cheaply and to have little effect on market prices.