It’s desperate life, and it shouldn’t be allowed. Many of these fossickers are small children, who should be at school, but there aren’t many around. Last month, the ABC program 4 Corners lifted the lid on the very uncomfortable secret of the global cobalt market – “blood cobalt.” This refers to the fact that much of the DRC’s production comes from mining practices that would not be allowed in a country like Australia: in particular, the practice of “artisanal” mining, where people living near the big cobalt mines fossick with their bare hands for cobalt-bearing rock left over, or dig their own shafts, without any proper mining techniques. Australia, which produces a small amount from various nickel mining operations, is the third-largest supplier (mainly from Glencore’s Murrin Murrin nickel-cobalt mine in Western Australia, which produces more than two-thirds of Australian cobalt output). The next largest supply source, accounting for about 4.5% of the world’s production, is Russia. More than 70% of the world’s cobalt comes from the African nation of Democratic Republic of Congo (DRC). (It’s not as transparent a market as gold or base metals or iron ore, as it relies on offtake agreements negotiated between producers and users.) That is up about 60% on a year ago.īut there is another aspect of the cobalt market that is increasingly interesting to ASX investors – and that’s on the supply side. That is an obvious recipe for a price rise, and cobalt is up about 60% in price over the last year, to about US$82,000 a tonne. Meanwhile, forecast supply growth will struggle to keep pace with this burgeoning demand. That is enough to double the size of the market, from 140,000 tonnes produced a year, to 310,000 tonnes.īy 2050, says Anglo-Swiss mining and trading company Glencore – which is the world’s largest producer of cobalt – about 507,000 tonnes a year of cobalt will be required, driven mainly by EV carmakers. Specialist research firm Benchmark Mineral Intelligence projects the demand for cobalt out of the global battery sector alone will grow by more than 20% this year, and grow at an average compound annual growth rate (CAGR) of between 8%–10% between 2022 to 2030. Batteries now account for more than half of global cobalt consumption and with EV sales predicted to balloon from 6.5 million in 2021 to 66 million by 2040, the world’s appetite for the metal is only growing. As the transition to renewable energy gathers pace, cobalt is in demand like never before. The metal is a crucial component of the lithium-ion batteries that power everything from smartphones to electric vehicles (EVs). Commodities move in and out of vogue on the Australian share market all the time, and one that is well and truly in the spotlight right now is cobalt.
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