Peak cobalt is not on the horizon, says Standard & Poor’s (S&P’s) Global Market Intelligence metals and mining research analyst Michael Giblin.
In a report published on Monday, he noted that 2017 had shown small changes in global cobalt supply. Global mined cobalt production showed a slight drop last year to 115 071 t from 116 272 t in 2016.
The majority of cobalt supply is sourced from copper/cobalt operations in the Democratic Republic of Congo (DRC), with the bulk of the remainder being mined at nickel/cobalt operations across the world.
The reduction in supply in 2017 was driven in large part by the loss of production from Lubumbashi Slag Hill, resulting in an overall reduction in output from the DRC.
Supply risks are associated with the dominance of the DRC in cobalt supply and these risks must be managed as there is no region that can match output
from the DRC, Giblin says.
He points out that the DRC alone has sufficient reserves to produce cobalt at current levels for over 30 years.
“The DRC alone [holds] about 50% of both global reserves and resources. The remaining 50% of reserves and resources are geographically diverse, with no region in a position to replace production if supply is disrupted from the DRC,” he notes.
S&P’s Global Market Intelligence, meanwhile, expects some large cobalt projects to come on line soon.
“We expect mined cobalt supply to increase at a compound yearly growth rate of 12% to 2021 with the majority of the growth from formal mining operations in the DRC.”
Production from diversified miner Glencore’s Kamoto mine had not restarted during 2017.
While copper production at the mine started slightly ahead of schedule at the end of 2017, cobalt supply started only in the first quarter of this year, with the cobalt circuit beginning production in the final month of the quarter.