What is happening with Glencore´s Congo Cobalt Mine?

A year ago, Glencore announced it would cease operations at its Mutanda copper-cobalt mine in the Congo, breathing life into a market whose trading volume was 70% below its peak 18 months earlier. Given that Mutanda is the largest cobalt mine in the world, generating around a fifth of global production in a market of just 135 kt per year, the market response has been subdued. The Congo dominates global cobalt production, and Mutanda was responsible for 60% of the Swiss commodity giant's annual production. While mine production in the Congo was largely undisturbed during the 19th century, most of the material is shipped via the South African port of Durban, which was closed for a long time earlier this year. Benchmark Mineral Intelligence, a battery supply chain and pricing agency, reports that prices for cobalt hydroxide (crystalline form produced in mines containing 20-40% cobalt) averaged $ 21,475 per tonne (100% Co, CIF Asia ), which corresponds to an increase of 26% compared to the same month of the previous year. According to the benchmark, persistent logistics problems led to a shortage of material on the spot market in China. This resulted in a surge in debt and prices north of $ 23,000 per ton for immediate cobalt shipments well into August. While disruptions along the Congo-South Africa-China route subsided over the remainder of the year and more supply could put pressure on prices again, a new report suggests that Glencore's strategy (which is similarly applied to the zinc market where the company also controls part of the market) could underpin cobalt prices in the medium term. Roskill, a London-based metals and minerals research company, says Glencore has signed multiple agreements with downstream customers of lithium-ion cathode, cell and original equipment manufacturers, including Tesla, Korean giants Samsung and SK Innovation, and the European one Battery manufacturer Umicore. Glencore has a strategic focus on forward sales of its established hydroxide inventory as well as future production from Katanga in the DRC (which is still in operation) and cobalt metal from Murrin Murrin in Australia (destined for BMW). Roskill expects Mutanda in the south of the country near the Zambian border will remain under care and maintenance for at least the next two years. This will allow Glencore to complete optimization studies around the transition from oxide to sulphide ore and allow time for the market to recover. Mutanda also produces around 200,000 tons of copper per year, and when the cobalt trade peaked in 2018, around half of its operating revenues came from battery raw materials.