At present, cobalt prices continue to rise by more than 500,000 yuan/ton, mainly due to the rapid growth of the two major demand fields of batteries and alloys, and the failure of imports of cobalt raw materials in China to achieve growth in 2021, and the import price continue to go up. Let’s have a look at the the research on cobalt industry.
1.Global reserves of cobalt resources are scarce
Cobalt is a very rare small metal resource and an important strategic resource for a country. Cobalt resources exist in various deposits in the form of associated deposits, mainly associated in sandstone-type copper deposits, magmatic copper-nickel sulfide deposits and laterite-type nickel deposits, of which sandstone-type copper deposits are mainly distributed in the Democratic Republic of the Congo and Zambia. . In the cobalt resource reserves, nickel and cobalt associated accounts for 50%, copper and cobalt associated accounts for 44%, and primary cobalt accounts for only 6%.
Congo (DRC) is located in the Central African copper-cobalt ore belt, with extremely rich natural resources, and the mining industry occupies the dominant position in the economy. Congo (DRC) has 80 million hectares of arable land and more than 1100 kinds of minerals and rare metals. The China-Africa copper-cobalt ore belt spans the Democratic Republic of the Congo (DRC) and Zambia. It is the third largest copper-rich area in the world, and it is also the sedimentary-reformed copper-cobalt ore mineralization with the largest resource reserves and the highest distribution density of deposits in the world. bring. The ore belt concentrates 10% of the world’s copper resources and 70% of cobalt resources. Among them, the Katanga copper-cobalt ore belt specifically refers to the Congo (gold) section of the Central African copper-cobalt ore belt.
②Congo ‘s unique hand-caught mine
Most of the Congo (gold) deposits are on the surface, and open-pit mines can be seen everywhere. Many locals can easily extract ores with copper and cobalt content of more than 30% from the surface, thus forming a unique “hand-grabbing” industry. More than 70% of the world’s cobalt supply comes from the DRC, and 15-30% of the DRC’s cobalt output comes from hand-held or semi-mechanized small-scale mines. Compared with mechanized mines operated by large multinational producers, hand-held miners respond faster to price changes and play the role of “swing producers”. When cobalt prices plummet, hand-held miners turn their attention to copper; cobalt When the price skyrockets, the mining of cobalt will be re-increased.
③The supply of cobalt raw materials in Congo is affected by logistics and transportation
The Port of Durban is located on the east coast of South Africa, on the southwest side of the Indian Ocean, and is the largest container port in South Africa. Congo (DRC) copper and cobalt ore is mainly transported by road to the port of Durban in South Africa, and then transported to the destination of the goods. Due to the relatively complete infrastructure of the Port of Durban, only a few cobalt ore is shipped out of Tanzania.
④ Chinese cobalt raw material import data fluctuates significantly
The news that Congo (DRC) has banned the export of unprocessed copper concentrate, cobalt concentrate and ore has repeatedly threatened cobalt supply, but the effective date of the ban has not yet been determined. Almost all of Congo’s cobalt concentrate is exported to China, but China’s imports of cobalt concentrate have fallen sharply in recent years, as most Chinese importers prefer intermediate cobalt products. In 2020, the physical volume of China’s cobalt concentrate imports is about 52,900 tons, equivalent to about 3,940 metal tons, a year-on-year decrease of 41.7%; from January to September this year, the physical volume of China’s cobalt concentrate imports is about 12,700 tons, equivalent to about 955 metal tons. A year-on-year decrease of 70.9%.
⑤The advancement of the Indonesian nickel-cobalt project will reshape the industry pattern
Indonesia is the country with the most abundant nickel resources and the largest nickel mine output in the world. The HPAL (High Pressure Acid Leach) process can process low-grade laterite nickel ore in Indonesia, and can recover the valuable element cobalt, with low energy consumption and low carbon emissions, and has significant cost advantages over other process routes. HPAL projects operating at full capacity are highly profitable. In addition, Indonesia’s rich reserves of low-grade nickel ore make the process resource limited and have broad development space. Over the years, HPAL technology has become more and more mature, and Chinese enterprises and design institutes have rich experience in HPAL process design and project operation, laying the foundation for the wide application of this process.
2. Global supply of refined cobalt: Chinese global market share of refined cobalt continues to increase
Cobalt intermediate products are further processed into cobalt refined products. Global refined cobalt production in 2020 totaled 132,000 tonnes, down about 5% year-on-year, according to Cobalt Institute data.
The decline in production is caused by various factors:
1) The supply of cobalt raw materials is reduced;
2) The global transportation of cobalt raw materials is affected by logistics and transportation;
3) The demand in aerospace and other industries has weakened due to the impact of the new crown epidemic. China is the world’s largest cobalt refining country, with refined cobalt production reaching 89,200 tons in 2020, accounting for 67% of the global total, followed by Finland (10%), Japan (5%), Canada (4%) and Norway (3%).
Global & China Cobalt Consumption Structure:
The lithium battery sector is the main driver for the growth of global cobalt consumption. Antaike predicts that in the global cobalt consumption structure in 2021, 3C lithium batteries will account for 36%, power batteries will account for 31%, and superalloys and cemented carbide will account for 7% respectively; in China’s cobalt consumption structure in 2021, 3C lithium batteries will account for 56%, power battery 31%, cemented carbide 4%, ceramic 3%, and superalloy 2%. In addition, China’s total cobalt consumption in 2021 will account for about 66% of the global total.
Tesla’s production and sales figures continue to exceed market expectations.According to Tesla’s official website data, the company’s 2020 Q1/Q2/Q3/Q4 car production was 10.27/8.23/14.50/179,800 units, a year-on-year increase of 33.10%/-5.49%/ 50.84%/71.38%; 2020Q1/Q2/Q3 /Q4 car sales were 8.85/9.09/13.96/180,600 units, an increase of year-on-year
40.43%/-4.68%/43.63%/61.09%; the annual production and sales scale in 2020 are 509,700 and 499,600 units respectively, which are in line with the goals set at the beginning of the year.
3.There is still huge growth potential in the DRC copper-cobalt sector in the future
1)The company indirectly holds 80% of the TFM copper-cobalt mine, which covers an area of more than 1,500 square kilometers and has a complete set of processes and processes from mining to processing. The main products are copper cathode and cobalt hydroxide. In the first half of this year, TFM overcame the adverse impact of the epidemic. The 10K project officially entered the trial production stage in July. The daily ore processing capacity increased from 15,000t/d to 25,000t/d. It was successfully put into full-load production at the end of September. The steady progress of the electrowinning workshop expansion project will further increase the copper and cobalt production capacity. It is expected that the copper metal production capacity will reach 250,000 tons/year and the cobalt metal production capacity will reach 25,000 tons/year by the end of the year. In the company’s annual report guidelines, it is estimated that TFM copper output in 2021 will be 187,300-228,900 tons; cobalt output will be 16,500-20,100 tons.
2) Huayou Cobalt Industry: For many years, it has been deeply involved in the copper and cobalt resource sector of the Democratic Republic of the Congo (DRC)
A joint venture project of 60,000 tons of nickel metal in Indonesia. The company invested 151 million US dollars through its wholly-owned subsidiary Huaqing Company, accounting for 57% of the shares. Huayou Company plans to build a laterite nickel ore hydro-smelting project with an annual output of 60,000 tons of nickel metal in Morowali Industrial Park, Indonesia, and an associated amount of 7,800 tons of cobalt metal. The total investment of the project is about 1.28 billion US dollars. Huayou Nickel-Cobalt (Indonesia) Wet Process Project adopts the most advanced third-generation high-pressure acid leaching process in the world to extract nickel-cobalt hydroxide from laterite ore, which has multiple advantages such as low cost and green environmental protection. put into production at the end of this year.
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