Katanga Mining Ltd Ord KATFF

Analyst says tighter cobalt market swings sentiment

[Sogosohubidu201]

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/54338255

However, following Glencore's announcement, which will mean taking production out of the market for the two years Benchmark believes that Mutanda will be out of action, Rawles said "it looks like 2020 we'll be in a big deficit," then from 2021 onward "there's a question of how well supplied the market will be."

While prices will react, Rawles said that by the time Mutanda comes back online, cobalt demand would have grown enough that the resumption would not flood the market.

The only unknown factor is how quickly the other Congo operators can respond, but Rawles said there have been problems on that front.

He also cited Eurasian Resources Group SARL's Metalkol RTR project, which Rawles said has had problems ramping up, while Chemaf SPRL's new cobalt hydroxide refinery in Congo was also expected to come online this year but is now looking like it will not arrive until 2021.

Thus Congo's cobalt supply is "anything but certain, and we're looking at a tighter picture going forward than previously expected," Rawles said.

"Sentiment has begun to swing in producers' favor," he said, adding that 2020 contract negotiations have already been impacted.

[Sogosohubidu201]

I do not agree with Rawles comments on Katanga mining. While it is true that Ion Exchnage will not come online until the middle of 2020,  Katanga mining is going to produce 1,500 - 2,500 tonnes of cobalt per month in H1 2020 and 90-94% or higher of the produced cobalt will be salable meeting the uranium specs with the phosphoric acid method per Q2 Glencore conference call. Yes, there will be

[bobsacramento]

Everyone has an agenda. I wonder if this “oversupply” news is just a means for the Chinese to take over the industry at discounted prices. They have a history of not honouring their contracts, and have on multiple occasions manipulated the markets (that’s not a surprise, given the trade war) Glencore finally has the leverage it needs to dictate prices with Mutanda and Katanga to even the playing

[bobsacramento]

Then again maybe the Chinese like the quarrel between Glencore and the DRC, because if the mines get nationalised or become unprofitable it will force them to sell to the Chinese at a discounted price. Maybe the Chinese have to wait this out, take over and before prices start to rise. The west needs to step up.

[Lech1988]

Yes I believe in theory they will produce around the lower end of that range per month but lets be honest the value of their communications to shareholders has been absolutely terrible.  Did you forget the ion exchange system casually being pushed back by a year?  Also have they clarified why costs continue to balloon making this mine that much farther away from profitability?