[annual Review] the proportion of cobalt demand in lithium industry will continue to climb, cobalt leading enterprises will step up production expansion.

SMM1 March 21: in 2020, the new energy vehicle industry is developing rapidly. According to the data of the China Automobile Association, the monthly sales of new energy vehicles have continued to show substantial growth since July compared with the same period last year, and the annual market sales are better than expected. The new energy vehicle market is still worth looking forward to in the future. Driven by good demand for new energy vehicles, the demand for cobalt raw materials upstream may increase, and SMM expects the proportion of cobalt demand in the global lithium industry to continue to rise to 60 per cent by 2023.

Leading enterprises have also stepped up financing and capital expenditure to prepare for a sustained increase in annual demand of a larger magnitude in the future. Here SMM summarizes the capacity expansion of cobalt leading enterprises.

On December 14, Luoyang Luanchuan Molybdenum Group Co., Ltd. intends to purchase its indirect 100% stake in Bermuda subsidiary through FCX, a wholly-owned subsidiary of CMOC Limited ((Chinese name "Luoyang Molybdenum holding Co., Ltd."), thereby indirectly acquiring 95% of the shares of Phelps Dodge Congo S.A.R.L., and 95% of the interest in Kisanfu Copper and Cobalt Mine of Congo (DRC). On the basis of the database provided by FCX, Luoyang Molybdenum Industry verified that the estimated amount of Kisanfu copper and cobalt ore resources is about 365 million tons of ore, with an average grade of 1.72% of copper and about 6.28 million tons of copper metal; the average grade of cobalt is about 0.85% and the amount of cobalt metal is about 3.1 million tons. The analysis shows that the Kisanfu copper-cobalt deposit is rich in resources and the average grade of copper-cobalt ore is high, so it has the potential for further exploration.

On November 27th, Trafigura signed a five-year cobalt supply agreement with Entreprise G é raledu Cobalt, a state-owned manual cobalt buyer of (DRC) in the Democratic Republic of the Congo. The trade agreement includes funding from Trafigura to finance the establishment of tightly controlled artisanal mining areas, the installation of ore purchase stations and the development of supply chain tracking. At the same time, Trafigura will receive deliveries of cobalt hydroxide from small and artisanal mines through EGC. The ore collected by Trafigura this time is likely to be sold to a wet process plant in the Democratic Republic of the Congo.

On November 23, the first batch of cobalt hydroxide products were successfully produced in the second phase oxidation project of Camoya Copper-Cobalt Mine in the Democratic Republic of the Congo (DRC), marking the full production of the second-phase copper-cobalt oxidation ore production system.

On November 11, first Cobalt plans to revise its previous agreement with Glencore to sign a long-term cobalt hydroxide procurement contract (long-term feed purchase contract)). First Cobalt is building a refinery in Ontario, Canada, which can produce cobalt metal and cobalt sulfate and is expected to start operation in 2021 with a maximum capacity of 5000 tons per year of cobalt (metal content).

In mid-November, Giga Metals announced the latest developments in the preliminary economic assessment of the Turnagain nickel-cobalt sulphide project. The results show that the mineral resources (including inferred resources) of the project can be exploited for 37 years, with an average annual production of 2000 tons of cobalt, with the goal of reaching the production level by 2021. The project is located in British Columbia, Canada, and is a wholly owned subsidiary of Giga Metals.

On July 23rd, China Chemical Engineering No. 6 Construction Co., Ltd. Indonesia Branch of Liqin OBI Nickel-Cobalt Project liu sulphuric acid plant 2 converters successfully capped. The project is located in (OBI), Obi Island, South Hamahera County, North Maluku Province, Indonesia, using international advanced wet smelting technology to extract Indonesia's rich laterite nickel ore. After the completion of the project, it will have an annual capacity of 240000 tons of nickel and cobalt hydroxide. The sulphuric acid plant is the precondition of the whole nickel-cobalt project, and the converter is the key equipment of the sulfuric acid plant.

On June 17, it was reported that Tesla and Glencore had reached a long-term agreement on the supply of cobalt, with an annual supply of about 6000 tons. Tesla and Glencore Cobalt raw materials are used in Shanghai and Berlin factories.

In March, Shengtun Mining completed the acquisition of Enzuli, further enhancing the company's ability to control upstream resources. In addition, the company also plans to invest in the Kalongwei copper and cobalt mine owned by Enzuri, with an annual production capacity of 30028 tons of cathode copper and 3556.4 tons of crude cobalt hydroxide.

On March 1st, the opening ceremony of the Huayue Nickel-Cobalt (Indonesia) wet process project was held in (IMIP), Li Qingshan Industrial Park, Morocco, Indonesia. This marks the beginning of a new chapter in all-round construction of the Indonesian project, which is the "main position" of the group's second venture, and the start of the Huayue Nickel-Cobalt wet project.

South Korean battery company Samsung SDI signed an agreement with global cobalt mining giant (Glencore) on February 18 that Samsung SDI will purchase 21000 tons of cobalt from Glencore between 2020 and 2024. According to a rough estimate, this scale can meet the demand for metal cobalt of more than 100GWh lithium-ion batteries, which can be equipped with more than 2.1 million electric vehicles.

In early February, it was reported that Katanga Mining, a subsidiary of Glencore, which operates in (DRC), Democratic Republic of the Congo, had reached an agreement to acquire land to provide land for the construction of Kamoto Copper Company (KCC) 's new long-term tailings treatment facility. KCC has a 75 per cent interest in the place. The use of land here will enhance KCC's ability to operate its mines and other infrastructure more effectively.

SMM expects global cobalt demand to increase to 146000 tonnes of metal in 2021, up 10 per cent from a year earlier, of which the demand for cobalt in the new energy vehicle industry is expected to grow by 35 per cent. In the medium and long term, although the trend of research and development of battery materials is "reducing cobalt", after a sharp correction in cobalt prices in recent years, the cost of cobalt prices is much lower than that in the previous period, and downstream enterprises will also balance the R & D costs and benefits. According to SMM estimates, the absolute demand for cobalt in the global new energy vehicle industry will still increase significantly in the next 5-10 years, which can also be verified by signing a cobalt raw material association with upstream cobalt raw material suppliers from terminal car companies and battery companies. Therefore, the expansion project of cobalt ore and cobalt hydrometallurgy intermediate products continues to meet the growing demand downstream.