China’s Pengxin starts cobalt hydroxide output in DRC
Chinese mining firm Pengxin International Mining has launched the first phase of its cobalt hydroxide production plant in the Democratic Republic of the Congo (DRC).
Pengxin started production at the plant on 18 December after completing trial runs. The first phase has a designed capacity of 3,000 t/yr cobalt metal equivalent.
The second phase will raise the plant’s capacity to 7,000 t/yr of cobalt metal equivalent, with further details including the launch date undisclosed. Pengxin’s subsidiary in the DRC Shituru Mining will operate the plant.
Chinese firms have been exploring cobalt resources in DRC, trying to meet increasing demand from China’s power battery industry. Chinese diversified metals producer China Molybdenum in December acquired 95pc of the Kisanfu copper-cobalt mine in the DRC from US-based base metals miner Freeport-McMoRan for $550mn.
Covid-19 lockdowns reduced mining and shipments of cobalt hydroxide from the DRC and South Africa in the first quarter of this year and suspended mines during April-May. Availability has tightened since August as shipments and logistics services recovered slower than expected.
The supply shortage sent cobalt hydroxide prices higher to $12.40-13.10/lb cif China on 22 December, up from $9.70-10.50/lb on 7 January, supported by buoyant demand from the Chinese chemicals industry. Market participants expect a flurry of buying activity in January when buyers typically return to the market to restock at the end of the month ahead of the lunar new year holiday in the middle of February.
