Katanga Mining Ltd Ord KATFF

RE:GEM and Glencore as well as Cobalt Price

[bobsacramento]

Sogosohubidu201 wrote: GEM had clarified on December 18, 2018 during the investor meeting that GEM had not halted purchasing cobalt from Glencore per the news or rumor of December 13, 2018 regarding GEM halting purchasing cobalt from Glencore. GEM said that GEM had been purchasing cobalt from Glencore and the relationship had been normal, and nothing had changed.

There had been a 20-30% gap between Chinese cobalt price and MB cobalt price in the 2nd half of last year, i.e. MB cobalt price 20-25% higher than Chinese market cobalt price. LME cobalt price was also 10% higher than Chinese cobalt price in the 2nd half of last year.  Everybody in the cobalt business both in China and outside knew that the gap would be narrowed and disappeared last year.  Sure, it was, we saw fast drop in MB and LME cobalt price to equal and even lower than the Chinese cobalt price in the last 2 - 4 weeks and in the case of LME, it overshoot to even far below the Chinese cobalt price.  

Chinese cobalt price on January 22, 2018 was  at $49,348 - 51,558 USD per tonne.  MB low grade cobalt price on January 23 was at $46,255 - 49,559 per tonne.  LME cobalt price is currently at $34,000 per tonne. 

Glencore/KAT sell cobalt based on MB low grade cobalt price.

Thanks for for the clarification. The real question is how much Glencore buys the Cobalt from Katanga. Because if it’s LME, then we are losing a big chunk of money, roughly 10k/ton.