INTERNATIONAL – Glencore Plc’s unit in the Democratic Republic of Congo will temporarily suspend sales of cobalt from its Kamoto mine after detecting low levels of radioactivity in supplies.
Katanga Mining, controlled by Glencore, said Tuesday it will build an ion exchange system to remove uranium, which is expected to cost about $25 million and be ready by the end of the second quarter. In the meantime, it’ll stockpile the vital battery ingredient while continuing to mine both cobalt and copper.
- The suspension comes at a convenient time for cobalt producers because there are mounting concerns that too much is currently being mined. There has been a supply-side response to a spike in cobalt prices, fueled by bullish expectations of growth in electric vehicles.
- Katanga accounts for about a quarter of Glencore’s African cobalt production, with 6,500 metric tons of the metal being mined in the first nine months of the year. Glencore produced 25,700 tons in Congo in that period.
- Glencore has been ramping up cobalt supply this year amid a boom in batteries, boosting production by 44 percent in the first nine months.
- Katanga shares plunged as much as 33 percent in Canada to the lowest since May 2017. Glencore shares fell 2.3 percent.
- So far, some 1,472 metric tons of cobalt have been impacted by the suspension, Katanga said in a statement.
- Katanga said the low levels of radioactivity detected in the uranium do not present a health and safety risk.
- The company will continue to mine and sell copper from the site, while stockpiling cobalt until it finishes the ion exchange plant.