Ivanhoe Mines executive says DRC cobalt bubble will burst
The demand for cobalt is a bubble that will burst as new battery technology reduces the need for the metal, according to the head of the chamber of mines in the Democratic Republic of Congo.
Democratic Republic of Congo is home to more than half the world’s cobalt resources
Congo holds more than half the world’s cobalt reserves, but the market’s negative perception of the central African nation’s business climate means companies will soon find alternative ways to create the power needed for the green energy revolution, Louis Watum of the Federation des Entreprises du Congo told a virtual conference on Monday, reports Bloomberg.
“I’m not a fan of cobalt,” said Watum, who is also an executive at Ivanhoe Mines and previously ran their Congo operations. “Cobalt is a bubble that is going to burst.”
Watum suggested investors focus instead on Congo’s copper, which he said has stronger fundamentals because of upcoming infrastructure expansion around the globe. Ivanhoe just started its Kamoa-Kakula copper project, which could become one of the world’s largest. Unlike many other copper mines in Congo, it won’t produce cobalt.
Copper production on the rise with Ivanhoe Mines in the Democratic Republic of Congo
Watum urged Congo’s government to guarantee investors more stability and to invest in energy and transportation infrastructure that will lower production costs for miners. Copper production in Congo currently costs about the same as in places like Chile or Peru, where mineral grades are a small fraction of those in the central African country, Watum said.
Fastmarkets quoted cobalt prices at $20.33 per pound on Friday, about $1.10 below its five-year average and well below the $44 it fetched in April 2018, though up 30% in the year-to-date. Copper is trading near an all-time high on the London Metal Exchange.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.