GLCNF - Top Cobalt Production by Country
Despite the decrease in cobalt prices, interest in the critical metal is still riding high, with analysts cautiously optimistic about the coming years.
One of the metal’s catalysts is excitement about electric vehicles. The lithium-ion batteries that power these cars require lithium, graphite and cobalt, among other raw materials, and demand is expected to keep rising as the shift toward electric vehicles continues.
Given those circumstances, it’s particularly interesting to look at top cobalt production by country. According to the latest US Geological Survey numbers, global supply increased in 2018, up slightly to 140,000 metric tons (MT) from 120,000 MT the previous year. Read on for a closer look at cobalt supply.
1. Democratic Republic of Congo (DRC)
Mine production: 90,000 MT
The Democratic Republic of Congo is by far the world’s largest producer of cobalt, accounting for roughly 60 percent of global production. The country has been the top producer of the metal for some time, with its output increasing from 2017 to 2018 at 90,000 MT.
As demand for cobalt rises, increasing attention is being directed at the DRC. Cobalt mining in the country has been linked to human rights abuses — in 2017, Apple (NASDAQ:AAPL) temporarily stopped buying cobalt mined by hand in the DRC. Due to increased concerns about supply, the London Metal Exchange is also taking steps to ensure all the brands listed on its exchange are following responsible sourcing guidelines.
In addition, last year, Congress in the DRC passed a revised mining law that increased taxes on cobalt, copper and other metals; the news has left miners concerned about how they may be impacted, and could push the price of cobalt higher.
Despite those challenges, the DRC is likely to remain key to the cobalt market for the foreseeable future. Glencore (LSE:GLEN,OTC Pink:GLCNF) has interests in two mines in the African country, Katanga and Mutanda. Katanga is set to become the world’s top producer of cobalt, according to the mining giant.
2. Russia
Mine production: 5,900 MT
Russia’s cobalt production remained flat in 2018, coming in at 5,900 MT.
With concerns about DRC cobalt running high, some automakers are calling for increased electric vehicle battery production in Europe. It’s possible that this push could prompt higher cobalt demand from Russia in the future — the only question is whether the country will be able to keep up. While its cobalt reserves stand at 250,000 MT, Russia is still well behind the DRC in terms of production. Large Russian miner Nornickel (MCX:GMKN) produces cobalt, and is the world’s top five producer of the mineral.
3. Cuba
Mine production: 4,900 MT
Cuban cobalt production declined slightly in 2018, at 4,900 MT. The country’s Moa region is home to a joint venture nickel-cobalt operation held by Canadian firm Sherritt International (TSX:S,OTC Pink:SHERF) and General Nickel Company of Cuba. Moa uses an open-pit mining process to mine lateritic ore, which is processed using high-pressure acid leaching on-site into mixed sulfides containing nickel and cobalt.
Cubaniquel, the country’s state-owned nickel miner, is the sole operator of the Che Guevara processing plant at Moa.
4. Australia
Mine production: 4,700 MT
Australia saw another drop in cobalt production from 2017 to 2018, with output sinking from 5,030 MT to 4,700 MT. Like many other countries on this list, cobalt produced in Australia is a by-product of copper and nickel mining. The country’s nickel mines are located in the western part of the country, mostly around the Kalgoorlie-Leonara regions.
As the DRC becomes increasingly challenging for miners, Australia is another country that’s receiving more attention as investors try to divert their interests away from Africa. Riding this wave of attention, Clean TeQ Holdings (ASX:CLQ,TSX:CLQ,OTCQX:CTEQF) raised an impressive AU$150 million in March 2018.
5. Philippines
Mine production: 4,600 MT
The Philippines is the fifth-largest cobalt producer in the world, putting out the same amount of metric tonnes than the year before. The Asian country is also a top nickel producer.
The fate of mining in the Philippines is up in the air as President Rodrigo Duterte and Environment Secretary Roy Cimatu continue to call for a shut of all mines in the country. For the past few years, Duterte has fiercely opposed the mining industry, as he believes the environmental damage far outweighs any benefit to the economy.
6. Canada
Mine production: 3,800 MT
Canada was the sixth-largest cobalt producer in the world in 2018, with output decreasing marginally from the previous year. As with Australia, Canadian cobalt comes mostly from large nickel and copper mines that produce cobalt as a by-product of their normal operations. Some of these major nickel and copper deposits are Kidds Creek, Sudbury and Raglan.
In the last couple of years, a number of junior miners have rushed to Cobalt, Ontario to stake land. The site is located near the Quebec border, and is known for producing large quantities of silver in the past. Now hopes are high that the area could be a cobalt hotspot. It’s still early days for many of these companies, but if they are successful it’s possible Canada’s cobalt production will rise in the coming years.
7. Madagascar
Mine production: 3,500 MT
Madagascar’s cobalt production remained the same from 2017 to 2018. The Ambatovy nickel-cobalt mine is the largest and most advanced mineral project in the country. It is located about 80 kilometers east of Antananarivo.
Sherritt International used to own 40 percent of Ambatovy, which cost more than $5 billion to develop. Late in 2017, Sherritt transferred 28 percent of its stake in Ambatovy in order to reduce its debt load. It will retain 12-percent ownership in the mine, and will continue on as operator until 2024.
8. Papua New Guinea
Mine production: 3,200 MT
Papua New Guinea has made the list of top cobalt production by country for a second year in a row. The small country off the coast of Australia produced 3,200 MT of cobalt as a by-product of nickel production. The country’s main cobalt producer is the Ramu nickel mine near Madang. The mine is a joint venture between private company MCC Ramu NiCo (85 percent), Highlands Pacific (ASX:HIG) (8.56 percent) and the Papua New Guinea government (6.44 percent).
In May 2018, Highlands signed a deal that will increase its ownership of Ramu to 11.3 percent and reached a C$145-million streaming agreement with Canada’s Cobalt 27 Capital (TSXV:KBLT,OTCQX:CBLLF). In January 2019, Cobalt 27 announced the friendly acquisition of the Australian miner.
9. China
Mine production: 3,100 MT
China’s cobalt production remained the same in 2018. According to the USGS, China was the world’s leading producer of refined cobalt and has been a leading supplier of cobalt imports to the United States. Most of the Asian country’s production was from partially refined cobalt imported from the Democratic Republic of Congo. In 2019, China was also the world’s leading consumer of cobalt, with more than 80 percent of its consumption being used by the rechargeable battery industry.
10. Morocco
Mine production: 2,300 MT
Morocco’s cobalt production increased last year, up from 2,200 MT in 2017 to 2,300 MT in 2018. Cobalt from Moroccan mines has been getting attention after major carmaker BMW (OTC Pink:BYMOF,ETR:BMW) announced it would buy cobalt directly from mines in Australia and Morocco to ensure its supply of raw materials is sourced responsibly.
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This is an updated version of an article first published by the Investing News Network in 2015.
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.