Heightened ownership of the Mutanda and Katanga mines in the Democratic Republic of Congo (DRC) puts cobalt in a strong potential earnings position for Glencore, the world’s dominant supplier of the metal that is attracting attention because of its growing use in electric vehicles (EVs).
In an equity research document on Glencore, Barclays mining analysts Ian Rossouw, Amos Fletcher and James Hutchison point out that the cobalt price has already risen by 50% in the year to date to $22/lb and suggest much scope for it to rise further owing to its increasing use in lithium ion batteries for EVs, laptops, personal computers, smartphones, polyester and tyres.
Glencore CEO Ivan Glasenberg singled out cobalt as having strong potential during a media conference last week, following the presentation of an excellent set of results by the London-, Hong Kong- and Johannesburg-listed company.
He made the point that while demand for cobalt is growing, no new copper mines are coming on board that have the cobalt byproducts.
It is a market of 100 000 t with 50 000 t produced in the DRC.
Barclays analysts note that Glencore currently produces 32 000 t of cobalt a year, up from 28 000 t in 2016.
They see cobalt production from Glencore potentially rising to the 50 000 t to 60 000 t level once Katanga is at full production.
Right now, cobalt accounts for $1.5-billion of the company’s revenue at the spot price, with every 10% price rise adding $150-million to its earnings.
The cobalt market is expected to remain in deficit for the foreseeable future.
Before his death just over a year ago, veteran metals research commentator Dr RE (Robbie) Robinson told MiningWeekly Online in a video interview that South African mines could recover more cobalt if they changed their blasting methods in hard-rock narrow-reef gold and platinum mines.
He urged at the time that, with the world suddenly taking new cognisance of cobalt because of its use in electric cars and microchips, hard-rock, narrow-reef miners should wasteno time in moving to selected blast mining (SBM), which he said also facilitated mine mechanisation in confined stopes that would simultaneously boost overall precious metal recoveries significantly.
“If you can selectively separate the reef part of the underground ore reserve and throw the waste rock aside, the cobalt concentration, once that ore reaches the surface, is very much higher and becomes easier to recover,” Robinsontold Mining Weekly Online at the time.
“If you adopt a zero waste, nontoxic philosophy on wasteresidues, it’s easy enough to recover all that cobalt, while also recovering uranium and quite a number of other elements that have potential value.
“We should be doing this, and it should be started just as soon as we possibly can,” the one-time National Institute for Metallurgy, now Mintek, director advocated.
With American companies focusing special research into cobalt recovery as a strategic metal, Robinson urged South African mining companies to do better with its squandered cobalt endowment.
US company Applied Materials, a provider of equipment, services and software used for manufacturingsemiconductors, sees cobalt as a superior metalencapsulation film, the first important change in materials for microchip wiring in 15 years.
The US technical media wrote of the change that the news was in the word "cobalt" and in the word "wiring", with the headline of another article proclaiming that, “cobalt is the key to future chips”.
By adopting the hydrometallurgical approach to platinumprocessing, cobalt is said to be recoverable as a high-purity cobalt metal.
Every narrow-reef gold mine has some cobalt in it, but it ends up as one of the toxic elements in acid mine drainage (AMD), which is currently also seldom out of the headlines.
Currently, South Africa’s approach to dealing with AMD is to precipitate it with lime and to put it on a waste dump and as the waste dump gradually weathers and leaches away, the toxic cobalt gets into the streams.
Robinson contended that this need not be so because there processes are available that, in a relatively easy way, can recover that cobalt and produce it as a cobalt oxide, which can be dissolved, electrolysed and made into metal.
Cobalt arises primarily from the Zambian/DRC copperbelt and as a by-product of the Bushveld platinum mines in South Africa.
The Chamber of Mines of South Africa says on its website that cobalt is found as a minor element in the base-metal sulphides of the Merensky reef of the Bushveld Igneous Complex (BIC), from which platinum-group metals are extracted, and also in a number of the BICs chromite layers – but makes no mention at all of its presence in gold-bearingreef.
Also used in many other diverse industrial and military applications, the US remains the world’s largest consumer of cobalt, but does not mine cobalt, apart from negligible quantities of by-product cobalt produced as intermediate products from some mining operations.
Other countries, including Australia, have woken to the cobalt opportunity, with a study into ASX-listed Broken Hill Prospecting’s New South Wales cobalt deposits pinpointing a new commercial opportunity that could deliver revenues of up to A$381.5-million a year, over a 20-year period.
In South Africa, it was Robinson’s contention that SBM could be satisfactorily carried out using shock tubes and delayed detonators and had the potential to resuscitate areas where gold mining has ceased.http://www.miningweekly.com/article/glencore-in-pole-position-to-benefit-from-growing-cobalt-demand-2017-03-01