Chinese firm Luoyang Molybdenum (CMOC) is set to overtake Glencore as the world's largest cobalt producer this year, Bloomberg reported Tuesday, as competition for the key green energy metal intensifies.
Lomolmolybdenum became a major player in the cobalt market for the first time in 2016 with the acquisition of the Tenke Fungurume (TFM) mine in the Democratic Republic of Congo. With the opening of KFM, another large mine in the second quarter, the company plans to double production this year, pushing its cobalt output above Glencore's.
Lomoloft has had a turbulent year in Congo, with exports of the TFM mine affected by a dispute over royalties since July. Lommolybdenum executives told investors on Monday that they were confident of resolving the issue by the end of March, according to a transcript of the call provided by Citigroup via email.
In comments at the Financial Times Global Commodities Summit in Switzerland, Congolese Finance Minister Nicolas Kazadi said he hoped to reach an agreement "very soon" that would remove a key source of uncertainty in the cobalt market. The fate of cobalt stocks is having an impact on the outlook.
Cobalt prices soared last year on the back of booming sales of electric cars, but have fallen in recent months amid slowing demand from the consumer electronics sector, rising production in Indonesia and concerns about surging exports from Congo.
Throughout the controversy, Luomodong has made rapid progress in developing its KFM copper-cobalt mine, overcoming cost blowouts and delays that are common in the mining industry. The $1.8 billion project began in March 2021 and will be operational in the second quarter, the company said in its annual report.
The project will produce 30,000 tonnes this year, putting it on track to overtake TFM and Glencore's Katanga as the world's largest cobalt mine, which produced 20,286 tonnes and 25,500 tonnes respectively in 2022.
The race for the key green energy raw material has put cobalt in the political spotlight, despite falling prices. In December, US Secretary of State Antony Blinken signed a memorandum of understanding with Congo and Zambia to explore ways to support their joint plans to develop electric vehicle value chains.
