Cobalt consumers were served another stark reminder of the need for more significant amounts of secure metal supply last month following a fatal mine collapse and a warning from UK scientists on diminishing reserves.
At least 19 illegal miners were killed at a copper and cobalt mine operated by Katanga, a subsidiary of Glencore in the DRC (Democratic Republic of Congo) last Thursday. Despite dipping 5pc, Glencore said the incident at the mine, which is frequented by around 2,000 unauthorised artisanal miners daily, will have no impact on Katanga’s forecast 24,000ts of copper production this year.
However, the news serves as a grim reminder of the issues associated with the cobalt sector’s over-reliance on the DRC, one of the poorest and most politically unstable nations in the world. Companies with operations in the DRC are currently facing challenges in the areas of environment, health and safety, and human rights when cobalt is extracted through artisanal mining. This dangerous practice makes up around 15-20pc of Congolese cobalt production. There are also concerns around the use of child labour in the nation, while the cost of doing business has also increased thanks to a recent mining code change that saw royalty costs shoot up to 10pc.
With around 60pc of the world’s cobalt currently being sourced from the nation, such issues can have a significant impact on both prices and supply. For example, prices soared last October after Glencore abruptly halted sales of the metal from the country after discovering uranium at its key mine…
This is an excerpt of an article first published on our sister site MiningMaven.com – to read the piece in its entirety, please click here…
