SMM News: "this year and in the long run, cobalt prices will rise." During the second "Belt and Road Initiative" International Cooperation Summit Forum, Song Ben (Benedikt Sobotka), CEO of Eurasia Resources Group (Eruasian Resources Group, said in an exclusive interview with interface news reporters.
"Cobalt demand is expected to quadruple by 2025." Song Ben said.
Eurasian Resources is a major global producer of copper, cobalt, ferroalloy and aluminum, headquartered in Luxembourg, with main assets concentrated in Kazakhstan, Africa and Brazil. The Government of the Republic of Kazakhstan is its main shareholder, accounting for 40 per cent of the shares.
Lithium battery is an important application market of cobalt. With the rapid development of new energy electric vehicles around the world, battery demand is also growing rapidly, and cobalt prices doubled in 2017.
Global battery demand is expected to rise 23 per cent year-on-year to 74000 tonnes in 2019, driving demand for cobalt by 14 per cent to 138000 tonnes, according to Bloomberg New Energy Finance.
However, in the past three months, cobalt prices fell rapidly, from 325000 yuan per ton on January 29 to 272300 yuan per ton, a drop of 16.2 per cent, due to factors such as weaker-than-expected demand and growth in supply. Compared with 664000 yuan per ton at the end of the first quarter of last year, the decline was nearly 60 percent.
Song Ben also mentioned that the new mining law of the Democratic Republic of the Congo (DRC) has added a windfall tax, increased the cost of cobalt ore, or pushed up the price of cobalt.
On March 28, 2018, the Democratic Republic of the Congo (DRC) introduced a new mining law, increasing 12 taxes, including windfall taxes. Among them, the current price exceeds 25% of the metal price that can be set by the project bank, and more than part of the profit will be charged a windfall tax of 50%.
When the new DRC mining law was introduced, large mining companies such as Glencore and Rand Gold protested, arguing that the DRC had reneged on its previous commitment to foreign miners to "remain unchanged for a decade".
The Democratic Republic of the Congo (DRC) accounts for about 70% of the world's cobalt reserves. Any policy change in the country will affect the global cobalt market. It also means that to be a major player in the cobalt market, you have to go there.
In addition to the mode of trade, Eurasian Resources is also working with Chinese enterprises to invest in cobalt mines in the Democratic Republic of the Congo (au).
On September 2, 2015, China Nonferrous Metals Construction Co., Ltd. (hereinafter referred to as China Color) and Eurasian Resources subsidiary Metalkol SA signed the General contract Framework Agreement for the Democratic Republic of the Congo (DRC) RTR project. In June 2016, the two sides signed a general contract for the project, with a contract value of about US $654 million for the first phase of the project, and construction began on February 6, 2017.
According to Song Ben, the RTR project was put into production last year. If it can reach full capacity, Eurasian Resources will become the second largest cobalt supplier in the world after Glencore and the largest cobalt supplier in China.
After the completion of the first phase of the RTR project, it can produce 14000 tons of cobalt and 77000 tons of electrolytic copper, which are mainly supplied to the Chinese market.
Song Ben said that in terms of progress, the RTR project will be able to achieve full production this year.
In addition to the RTR project, Eurasia reportedly owns two other copper and cobalt mines in the Democratic Republic of the Congo, with plans to produce 20, 000 tons of cobalt and 230000 tons of copper this year.
Eurasian resources generated $5.048 billion in revenue in 2017, with the Chinese market contributing 20 per cent to 25 per cent of its revenue. Including contractors, it has more than 85000 employees worldwide.
At present, the mining heat of cobalt in Chinese resource enterprises has not been reduced.
According to information published on the website of the Ministry of Commerce of China in 2017, Huayu Cobalt Industry (603799.SH), Cold sharp Cobalt Industry (300618.SZ), Luoyang Molybdenum Industry (603993.SH), Zijin Mining Industry (601899.SH), Minmetals Resources (01208.HK), China Iron Resources Group, Jinchuan Group, More than a dozen Chinese enterprises, including Shanghai Pengxin, have invested in minerals in the Democratic Republic of the Congo (DRC). The first few cobalt enterprises are in the Democratic Republic of the Congo (DRC) "Amoy Cobalt".
On June 10, 2018, Sinochem and Metalkol SA signed the "Democratic Republic of the Congo (DRC) RTR Project Phase II EPC General contract", with a total contract value of US $155 million, which officially started on August 1, 2018.
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