Soaring demand for copper will help drive mergers, BHP CEO says
Demand for copper, a key element in the energy transition, is set to rise by 70% to 100% by 2050, Mike Henry said
Shares in Toronto-listed Katanga Mining, added another 25% in value on Tuesday after announcing it has restarted its giant copper-cobalt operation in the Democratic Republic of the Congo.
On Monday trading in the company’s shares were briefly halted on the TSX after investors piled into the US$2 billion stock, but the rally continued on Tuesday with shares in Katanga now up 52.7% over two days.
Swiss mining and commodity trading giant Glencore which owns 86% of Katanga suspended mining at the central African mine in 2015 as copper slumped to six-year lows and cobalt prices languished at levels not seen in nearly two decades.
Glencore confirmed it was in talks with Tesla, Apple and Volkswagen on the supply of cobalt
After a major refurbishment Katanga’s cobalt production was forecast at 11,000 tonnes in 2018 before tripling the following year to 34,000 tonnes and maintaining those levels in 2019.
Annual global production is pegged at some 110,000 tonnes. Cobalt is almost entirely the by-product of copper and nickel mining and the bulk is produced in the politically unstable DRC, raising concerns of supply.
Cobalt prices have gone ballistic in 2017 with the metal quoted on the LME vaulting past $75,000 a tonne, a 127% surge year to date.
Just over the last three weeks the price is up by more than 20%, but the jump in production from Katanga may cool the market for the raw material which has been the main beneficiary of the scramble for raw materials used in batteries.
Glencore says it expects to produce 63,000 tonnes of cobalt annually by 2020 and the world’s number four miner also confirmed it was in talks with Tesla, Apple and Volkswagen on the supply of cobalt.
Copper output at Katanga of 150,000 tonnes was expected next year and 300,000 tonnes per year starting in 2019, placing it in the top 20 of global copper mines in terms of production.
