Cobalt is an important mineral resource for the development of strategic emerging industries, and the application of cobalt compounds in the battery field has been an important factor in promoting the development of the cobalt industry in recent years. Among them, cobalt tetroxide and cobalt sulfate are key raw materials for the production of cathode materials such as lithium cobalt oxide (LCo, LiCoO2), lithium nickel cobalt manganate (NMC, LiNiMnCoO2) and lithium nickel cobalt aluminum (NCA, LiNiCoAlO2). In addition, cobalt has an irreplaceable role in aerospace, military and polymer applications. The China’s National Mineral Resources Planning program (2016-2020) lists cobalt as one of the 24 strategic minerals.
The history of global cobalt consumption has shown an overall growth trend. The main growth point comes from China, while consumption in the United States, Japan and Europe is relatively stable. In China, the growth of electronic products and new energy vehicles has driven battery consumption and was the main factor behind the rapid growth of cobalt consumption. Cobalt in the United States and European countries is mainly used to manufacture super alloys and high-end cemented carbides. The industry is developing steadily, and there will be no drastic changes in the demand for cobalt. The Japanese battery industry has matured and its demand for cobalt has also been stable.
There is a severe shortage of China’s cobalt ore supply. 90% of the raw materials are imported. 88% of the global cobalt mining output comes from Congo (DRC). The cobalt resources of the four major Chinese cobalt companies are all from DRC which impacts the stability of their production.
Huayou Cobalt is well established in Congo. Huayou has 4 mines through its subsidiaries MIKAS and CDM, and controls a total of 70,000 tons of cobalt output. The company holds 100% of the equity of MIKAS, thus owns the KAMBOVE and SHONKOLE mines, and controls 16.3 million tons of cobalt resources; Huayou Cobalt controls the Luiswishi and Lukuni copper and cobalt mining sections through the PE527 mining rights of the subsidiary CDM.
Midstream has steadily increased the production capacity of cobalt products. The company has a production capacity of approximately 9,000 tons of cobalt products from the Tongxiang headquarters factory and 18,000 tons of cobalt products from Huayou Quzhou. In recent years, the company has been in a period of rapid expansion of production capacity. At the end of 2019, the company completed the Huayou Quzhou Cobalt Metal Technical Transformation Project with an annual output of 30,000 tons, which is expected to be officially put into production in 2020. By then, the company will have a total production capacity of 39,000 tons of cobalt products.
Hanrui Cobalt built its presence in the Democratic Republic of the Congo mainly through leased mines and private mining acquisitions. Hanrui enjoys upstream cost advantage. It acquires cobalt locally at low prices and conducts preliminary screening and processing. Cobalt concentrate is formed and transported back to China for further processing. In 2019, the company’s 3,000 tons of cobalt powder production capacity in Chuzhou, Anhui Province was put into production, which nearly tripled the company’s cobalt powder production capacity. The company currently has a capacity of 4,500 tons of cobalt powder, 5,800 tons of cobalt salt, and 4,000 tons of cobalt concentrate. At the same time, the company plans to build 5,000 tons of cobalt production capacity in Congo (DRC), which is expected to be put into production in mid-2020; Ganzhou Hanrui also plans to build 10,000 tons of cobalt new material production capacity and 26,000 tons of ternary precursor production capacity.
China Molybdenum has mastered overseas high-quality mineral resources through a number of mergers and acquisitions and has gradually transformed from the molybdenum producer into a diversified producer of multiple minerals. In 2016, China Molybdenum acquired a 56% interest in the TFM copper-cobalt mine in DRC. In 2019, it acquired another 24% interest in the TFM copper-cobalt mine. TFM copper-cobalt mine has one of the world’s largest reserves. The proven ore resources are 857.7 million tons, and the annual output in 2019 was 54,200 tons.
Shengtun Mining has subscribed for a total of 65% of the shares of Dali Sanxin twice to control the core cobalt resources of Yongping County, Yunnan Province; subscribed for 25% of the shares of CMI, opening the way for overseas cobalt resources expansion; acquiring Nzuli Copper Mine Co., Ltd. The company has 100% equity and holds the high-quality cobalt source of the Kalongwe project and FTB project in the DRC. The Kalongwe project has proven cobalt resources of 42700 tons, and the FTB project is still in the exploration stage. Since February 2018, the company’s subsidiary in the Democratic Republic of the Congo has annual capacity of 3,500 tons of crude cobalt hydroxide wet smelting. The company currently plans to carry out the second-phase capacity expansion project, and is expected to add 5,800 tons of crude cobalt hydroxide capacity after the completion of the construction.
The application of cobalt in traditional industrial fields is mainly concentrated in super alloys, cemented carbides, catalysts and other industries. Generally speaking, cobalt in these fields is not easy to replace. With the rapid development of the global new energy automobile industry, cobalt is one of the key raw materials for vehicle power batteries, and resource consumption is increasing. In 2019, the global demand for cobalt is about 133,500 tons, and the demand for non-power batteries dominates. In terms of downstream demand, the total demand of non-battery fields including superalloys (14%), cemented carbide (7%), magnetic materials (6%), catalysts (4.1%), etc. accounted for 45.7% of total demand, while the battery sector demand accounted for 54.3%. Among them, the demand for non-power batteries (consumer batteries, energy storage batteries) accounted for 39.4% of the total downstream demand.
“Made in China 2025” proposes a major strategic deployment to comprehensively improve the quality and level of China’s manufacturing development, which will greatly promote the research and development of high-end manufacturing materials, such as super alloys used in aircraft engine turbines, space vehicles, rocket engines, and military industries. , cemented carbides, etc. This together with EVs will inevitably bring about the growth of cobalt consumption. The demand for cobalt in this field will maintain a constant growth. reaching 32,000 tons in 2025.