Katanga Mining Ltd Ord KATFF

Massive Cobalt Offtake Deal Between Glencore and GEM

[Lech1988]

GEM Co. Ltd (GEM) and Glencore are pleased to announce that they have entered into a five year agreement for the supply of cobalt hydroxide (cobalt).

Under the terms of the agreement, Glencore will provide a minimum of 61,200 tonnes of Cobalt for GEM between 2020 and 2024.

That is massive and is a good chunk of Glencore's planned KAT production.

[MalayalamFTW]

Impressive. Another 10% of global cobalt supply eaten away by a single company.

[Brandonrr]

any talk of how much they will pay per tonne or other details of the agreement?

[Lech1988]

Likely a spread vs. MB price.  So basically guaranteed spread vs what they offtake from KAT at.  Can't find any details but I seriously doubt GLEN would agree to fix price deal for that many year. 

[Lech1988]

Still a little confused about Cobalt metal vs Cobalt hydroxide.  They seem to use these terms interchangeably but this isn't correct I assume.  Does Glencore offtake from KAT at MB Cobalt metal price?  Where does the metal mined get turned into hydroxide?

[topdop]

@Lech1988 we've covered this here before: Cobalt hydroxide Co (OH)2 is 61.5% Co metal. "It is a specialty product utilized in the preparation of both refining and petrochemical catalysts... (and) has high chemical purity and is standardized with 61.5% cobalt content." https://www.freeportcobalt.com/products/chemical.html These are my views only. Thanks for reading.

[Lech1988]

Yes I thought we had.  So in reality people need to understand that the Cobalt hydroxide volumes are a lower % of actual Cobalt metal mined from KAT than the headline tonnage suggests.

[topdop]

Yes, which is why most responsible, international miners announce production results using phrases like "xxxx tonnes of metal produced contained in concentrates". This must not be confused with the rest of the (irresponsible) pack that don't differentiate up front. PS: BTW, good Glencore offtake with GEM. And note they were the prior clients whom alledgedly walked away 2 years ago

[Sogosohubidu201]

GEM and Glencore agreement is for GEM to purchase cobalt hydroxide containing 61,200 tonnes of cobalt metal equivalent with details below: 2020: cobalt hydroxide containing 13,200 tonnes of cobalt metal equivalent 2021: cobalt hydroxide containing 12,000 tonnes of cobalt metal equivalent 2022: cobalt hydroxide containing 12,000 tonnes of cobalt metal equivalent 2023: cobalt hydroxide containing

[Lech1988]

Yes this is clear now.  My confusion was with whether those tonnages were of "hydroxide" meaning the actual cobalt metal content is much lower than headline numbers.  Good to see it is in fact cobnalt metal equivalent volumes.  

[abissas]

This post has been removed in accordance with Community Policy

[topdop]

@sogosohubidu201 I believe your final paragraph is incorrect and likely misleading: The new Glencore offtake is for the sale of 100k of Cobalt Hydroxide. Why? As announced, their deal is for the sale of around 61.5kt of Co metal (shipped as Cobalt Hydroxide) As Co (OH)2 is a defined chemical compound, it's structural composition cannot differ. This chemical composition carries a molecule

[Sogosohubidu201]

@topdop: The agreement between Glencore and GEM is for crude cobalt hydroxide product. In fact, China imports cobalt hydroxide from DRC is mainly in the form of crude cobalt hydroxide containing 25-35% cobalt. The current price for cobalt hydroxide is $11.5 USD per lb with 30% cobalt. See below the example (2nd line):

[topdop]

@Sogosohubidu201 yes I do see your reference Sogo, but you can also surely see that the Glencore announcement beggars the question of Cobalt Hydroxide quantities: how much are they contracted to sell? And outside of Cu cathode, what is it, exactly, that KAT produces by way of Co product? By announcing offtake agreements for 61.5kt of Co metal when the molecular content of a Cobalt Hydroxide

[Sogosohubidu201]

@topdop. This can easily be calculated depending on the cobalt content of cobalt hydroxide.  GEM is going to purchase cobalt hydroxide containing 61,200 tonnes of cobalt metal equivalent 2020-2024.  Assuming 30% cobalt content, that will be 61,200 / 0.30 = 204,000 tonnes of crude cobalt hydroxide product.   KAT is projecting to sell cobalt hydroxide containing 30,000 tonnes of