Katanga Mining Ltd Ord KATFF

RE:RE:No, I don't believe its "Strategic"...

[Lech1988]

One thing that must be kept in mind here is that this supposed radiation export ban isn't sustainable long term (or even medium term).  Right now the market could feasibly blame this solely on Katanga, but if we have further delays on clarity regarding the Ion Exchange system or if the end solution is just ore blending (which is likely the case) nevertheless it becomes embarrassing for the DRC who is supposedly trying to show the world that they are a reliable source of Cobalt.  I can't imagine we have quarter after quarter of "we are discussing with our partner Gecamines on the feasibility of the Ion Exchange System and continue to work on interim solutions".  

If their largest Cobalt mine continues to have problems and they are perceived as doing nothing to fix it it seriously diminishes their credibility not to mention the tax and royalty revenue they are missing out on. 

With regards to the financial impact of this...in an oversupplied market it makes perfect sense for Glencore not to want to offtake the production and for them to delay it as long as possible.  The financing of the inventory and price risk is now with KAT instead of Glencore - the market does not need another circa 30kt of Cobalt this year so it would just sit in Glencore's warehouse on their dime.  This cost is now shifted to KAT (and us).    

Its a very clever (and legally dubious) move by Glencore if our suspicions are correct.