Africa's dominant position in global supply of cobalt will make it critical factor in development of lithium-ion batteries
While lithium projects are being developed on the continent, these are relatively insignificant when compared with hard rock and brine lithium projects in South America and Australia, delegates at the Investing in African Mining Indaba in Cape Town were told today.
Around 65pc of the world's cobalt supply comes from the Democratic Republic of Congo (DRC). This is expected to rise to 70pc over the next five years as more projects come on stream, Tony Southgate of Eurasian Resources Group said.
Eurasian has cobalt and copper projects in the DRC and neighbouring Zambia and is developing a new cobalt processing facility in Kolwezi, in the south of DRC. Small amounts of cobalt are produced in Zambia and South Africa and some exploration is taking place in Namibia.
"Cobalt is the most relevant to Africa in the battery metals environment, followed by copper. We could have sold our output at Kolwezi three times over. That's how strong the interest is from battery makers and automotive companies," he said.
Cobalt is a by-product of copper output in the DRC with 1t of cobalt being produced in association with 10-12t of copper. Electric vehicles are expected to have 27pc more copper in them than internal combustion engine vehicles, Southgate said.
Outside of the DRC, cobalt is usually a by-product of nickel with 1t of nickel being produced in association with 30-40t of nickel.
"It is difficult to overstate how critical cobalt is in the electric vehicle and energy storage market and how critical cobalt is to the global supply of cobalt," he said.
Between 20pc and 25pc of cobalt output in the DRC comes from artisanal mining, some of which is good mining, some of which is bad, possibly involving child labour. Ongoing steps are underway to certify that the cobalt supply chain is internationally acceptable.
While cobalt prices doubled over 2017 to a current price of $37/lb, panellists at the Mining Indaba expected it to rise to $47-$50/lb in the short to medium term.