“Cobalt is floundering”

    Raw cobalt powder at a processing plant in Lubumbashi, Democratic Republic of Congo, in February 2018.

    Ihe sky is less blue for cobalt. As the price of metal hovered in the skies of the Côte d’Azur a year ago, it suddenly stalled and went into a nose dive. Since January, the air pocket has amounted, in value, to almost a third. Cobalt is struggling… A tonne is currently trading around 34,500 dollars (32,135 euros) on the London Metal Exchange. The comparison is even more brutal, if the cursor is placed in the spring of 2022: the ceiling of 80,000 dollars was then exceeded, after an accelerated ascent of the bluish metal.

    Investors are shooting the fallen former star on sight. Ball-trap on the cobalt. But, to explain this settling of financial accounts at OK Corral, they do not lack cartridges. They underline the overheated production of this raw material. In 2022, the extraction of this co-product from copper and nickel mines is running at full speed, and volumes are said to have increased by more than 20%. Another element in the line of sight of investors: customer appetite has slowed. A slowdown caused, in particular, by the less dynamic of the electronics industry. Going from a deficit to even a moderate surplus triggers the barrel of the markets.

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    However, the power of attraction of this metal described as “electric” remains strong. The players are overexcited by the prospects for sales of batteries for electric vehicles. Because if a few grams of cobalt slip under the shell of a smartphone, the gauge goes into kilos under the hood. The room for maneuver is tight for the automotive industry concerned about its supply. Especially since three quarters of the volumes of cobalt come from the rich subsoils of the Democratic Republic of Congo (DRC). A country where the conditions of extraction are tinged with corruption and the use of child labor. An ethical puzzle for builders.

    Congolese jackpot

    Tensions have risen a notch around the Congolese cobalt goldmine. The president of the DRC, Félix Tshisekedi, wants a revision of the mining agreement concluded in 2008 with China. Cobalt and copper against the construction of infrastructures, is the barter contract fake? The DRC wants to increase its stake in the Sino-Congolese mining joint venture Sicomines and better guarantee its interests. A dispute also broke out with the Chinese group CMOC over the royalties, deemed insufficient, paid to operate the Tenke Fungurume mine. Since July 2022, the Congolese authorities have stopped exports before settling the dispute in April. The stored metal should now flow…

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