China smelter group agrees to lower Q1 copper charges
The charges tend to fall when ore supply declines and rise when more concentrate is available.
China Molybdenum Co., one of the world’s biggest cobalt producers, saw its output of the battery metal fall 24% year-on-year in the first half, according to Reuters calculations based on company filings.
China Moly, which operates the Tenke Fungurume mine in the Democratic Republic of Congo (DRC), said in a statement on the Shanghai Stock Exchange it produced 6,543 tonnes of cobalt metal in January-June this year. It had reported output of 8,614 tonnes in the first half of 2019.
The number implies second-quarter production of 3,299 tonnes of cobalt, a key ingredient in batteries for electric vehicles.
The company’s annual cobalt production target was set at 14,000-17,000 tonnes for 2020, although a China Moly spokesman said in April a “high copper, low cobalt” production strategy was adopted for the first half for pricing reasons.
Cobalt prices on the London Metal Exchange are up 16% this quarter on concerns coronavirus-related mining and logistics restrictions may curb output in the DRC, the world’s biggest source of cobalt, and speculation China will stockpile the metal.
China Moly placed Tenke Fungurume in isolation in March due to the virus.
The mine also produced 90,972 tonnes of copper on a metal content basis in the first half, China Moly said on Sunday, up 2.8% from a year earlier and in line with its annual target of 163,000-200,000 tonnes.
Tenke Fungurume director Simon Tuma-Waku said in May he expected stable output from the mine in 2020 despite the covid-19 disruption.
(By Tom Daly; Editing by Hugh Lawson)
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