China’s CMOC Group is expected to become the world’s biggest producer of cobalt—toppling Glencore from the top spot—after it opens a new mine in the Democratic Republic of Congo later this year, according to company filings and estimates by Bloomberg.
CMOC Group became one of the world’s dominant players in cobalt when it bought in 2016 the Tenke Fungurume mine in DRC, giving China a strong position in yet another mineral critical for the energy transition.
Now CMOC is expected to open a new mine in DRC in the second quarter of this year, which would make it a larger producer of cobalt than Glencore.
Yet, cobalt supply from the operating Tenke mine hasn’t been exported since July 2022 due to a dispute over royalties between the Chinese firm and its Congo state-held junior partner in the venture.
CMOC Group executives have signaled that the dispute could be resolved by the end of this month.
A price slump in the cobalt market in recent months was the result of a surge in supply and slower demand amid rising production in Indonesia, and an expected jump of cobalt supply out of the DRC once the CMOC Group royalty dispute is over.
Production growth in the DRC, the world’s top cobalt supplier, and in Indonesia, a relatively new entrant in the cobalt production market, drove the surge in cobalt supply last year, according to a Darton Commodities report cited by Bloomberg.
Another report from Darton Commodities, quoted by the Financial Times, expects that China’s share is set to hit 50% of global cobalt output in the next two years. China’s CMOC Group is the second biggest producer of cobalt in the DRC, the country providing 75% of the global supply currently.
In cobalt refining, China’s grip on the market is even higher as it holds 77% of the global cobalt refining capacity, FT noted.
Source: Oilprice.com