China’s CMOC attains cobalt output crown

Rising output from a new African mine helped China’s CMOC Group become the world’s largest cobalt producer over Glencore (LSE: GLEN).

CMOC produced 55,526 tonnes of cobalt last year in the Democratic Republic of Congo (DRC), a 170% increase over 2022, the company said in a filing on Thursday. The Kisanfu mine started in the second quarter and the Tenke Fungurume mine recovered production, it said.

Glencore in October forecast its 2023 cobalt output at 42,000 tonnes, slightly less than the previous year’s production.

Cobalt prices have plunged 40% from a year ago even as producers stockpiled output to prevent it from reaching markets. The price was US$29,135 per tonne on Friday for the metal used in mobile phones and electric vehicle batteries.

BMO Capital Markets predicts more price falls or supply sidelining this year.

“This dramatic rise in supply has not been matched by demand growth,” BMO commodities analyst Colin Hamilton said in a note on Friday. “Greater cobalt production cuts will be required in 2024 to bring this market back towards balance.”

Indonesia is also a rising cobalt producer. It doubled output to 5,000 tonnes in 2022. S&P Global forecasts the Asian archipelago will beat neighbour Australia by a nose as the number two producer this year and mine 10,100 tonnes of the metal. That’s up from an estimated 7,600 tonnes last year. Australia is forecast this year to produce 10,000 tonnes vs. 9,500 tonnes in 2023.

Joko Widodo, whose Indonesian presidency ends next month with elections because of term limits, has boosted cobalt output as part of domestic electric vehicle supply chain. The country in 2019 banned nickel exports, prompting four Chinese nickel refiners to invest in local operations.

S&P forecast DRC production this year at 227,000 tonnes vs. 196,900 tonnes in 2023; Zambia at 8,500 tonnes vs. 8,200 tonnes; and Russia at 5,400 tonnes vs. 5,100 tonnes.