China increases cobalt production in DRC
Chinese mining firms have significantly boosted cobalt production in the Democratic Republic of the Congo (DRC) in a bid to expand their market share, intensifying the strain on a commodity facing a sharp price decline.
Cobalt, a crucial component in electric vehicle (EV) batteries, is often combined with nickel to enhance the energy density of lithium-ion batteries.
Yet, to address environmental and geopolitical concerns, some EV manufacturers like Tesla Inc. (NASDAQ:TSLA) have shifted from Nickel Manganese Cobalt (NMC) batteries to Lithium Iron Phosphate (LFP) batteries, minimizing their reliance on cobalt.
China remains the largest importer of cobalt, accounting for over 60 percent of the world’s cobalt imports. However, an increase in cobalt supply from countries like the DRC and Indonesia has led to a substantial price drop, plummeting from $81,790 per metric ton in April 2022 to $33,140 per metric ton.
Recent trade data indicates China’s cobalt exports totaled $12.5 million, while imports reached $205 million in October. This resulted in a negative trade balance of $193 million.
Comparing figures from October 2022 to October 2023, cobalt exports from China plunged by $16.3 million (-56.7 percent), while imports decreased by a staggering $141 million (-40.7 percent).
Forecasts from Project Blue suggest that Indonesia’s cobalt production could quadruple by 2033, potentially exceeding these projections.
