cobalt in lithium ion batteries from 75k to 152k tonnes-2024https://www.benchmarkminerals.com/glencores-revamped-gem-deal-could-leave-electric-vehicle-makers-short-of-sustainable-cobalt/
Glencore announced a revamped deal with the world’s largest precursor producer, GEM Co Ltd, for cobalt hydroxide that equates to 61,200 tonnes of contained cobalt for a five year period between 2020 and 2024. This is compounded by the fact that Umicore – which is set to be the new owner of the Kokkola cobalt refinery in Finland after the acquisition from Freeport Cobalt completes later this year – will receive up to 12,000 tonnes a year of this material, Benchmark Minerals estimates.
This means over 50% of Glencore’s cobalt production is tied up in long term contracts with two major customers.
Benchmark Minerals forecasts cobalt demand in lithium ion batteries to increase from 75,000 tonnes in 2019 to 152,000 tonnes in 2024, with a total market size of 213,000 tonnes.
The announcement of the Mutanda closure caused a upward price reaction and saw the Benchmark Minerals’ Cobalt Hydroxide CIF Asia Assessed Price increase by 17% in August and a further 20% in September.
Mid-point cobalt hydroxide prices as of July 2019 rose from $17,050/tonne to $24,175 in September, a significant increase after 15 straight months of declining prices.
It also had a significant impact on Benchmark Minerals’ Cobalt Forecast, shifting the market into structural undersupply by as early as 2020, three years sooner than expected such is the size of the Mutanda operation.
Over the past 18 months, however, Benchmark Minerals has seen significant cobalt stockpiles grow in the DRC and elsewhere in Africa which will be sufficient to feed the market in 2020 and soften the short term blow.
Doubts still remain over whether cobalt’s ex-Glencore supply base can or is willing to expand supply in time for 2021 onwards, especially considering how difficult the industry finds predicting the leading producer’s strategy.3,000 tonnes.