- Write by:
-
Friday, June 19, 2020 - 7:13:38 PM
-
793 Visit
-
Print
Mining News Pro - Elon Musk is giving his rivals the heavy metal blues.
By securing 6,000 tonnes a year of cobalt directly from mining giant Glencore’s Democratic Republic of Congo operations, the Tesla boss is guaranteeing plentiful supplies of the battery ingredient while minimising headaches over its provenance.
With China hoovering up more and more of the blue metal, he’s also putting the squeeze on electric vehicle competitors like General Motors and Volkswagen.
DRC should wield more power over the cobalt market than Saudi Arabia does over the oil one. Its south-eastern Katanga region is home to two-thirds of the metal’s available reserves. But DRC’s reputation for conflict and strife makes it risky and expensive to get at. Hence why Musk has always expressed a preference for engineering cobalt out of Tesla car batteries.
Securing a quarter of Glencore’s Katanga Copper Company’s cobalt, around 4% of world output, suggests that preference is still some way from reality. It’s nearly four times what Tesla used in 2019, according to consultancy Benchmark Mineral Intelligence.
By focusing on the only non-Chinese cobalt miner in DRC, Musk is also minimising the risk of labour abuse exposés, especially when Covid-19 is hampering normal on-the-ground supply-chain auditing.
Glencore’s more mechanised operations make it unlikely that cobalt from rocks dug out by DRC’s legions of pick-wielding informal miners, some of them children, finds its way into Tesla batteries. That’s less verifiable with smaller-scale Chinese producers.
Musk’s Western rivals will find it harder to find similar peace of mind, especially as Volkswagen, BMW and General Motors’ vehicle batteries all use more cobalt.
This year, Glencore’s DRC mines will produce 26,000 tonnes of cobalt ore, about 18% of global supply. Chinese operators like China Molybdenum, will produce another 37%. Yet off-take agreements with miners like Glencore, which sends half its DRC cobalt ore to Chinese processors like Gem Jiangsu Cobalt Industries, mean that Chinese refineries control almost 70% of the world’s refined cobalt, according to BMI.
With Tesla and China tying up almost three-quarters of the world’s available supplies, there will be less for everybody else. The metal is currently fetching just $30,000 a tonne, a third of its 2018 peak, due largely to a glut of supply from DRC’s informal miners.
As and when prices recover, Musk will be insulated.
Short Link:
https://www.miningnews.ir/En/News/550275
A Russian arbitration court ruled on Monday that four units of Swiss commodities trader Glencore will pay more than 11.4 ...
A prefeasibility study for Predictive Discovery’s (ASX: PDI) Bankan gold project in Guinea gives it a net present value ...
A Native American group has asked all members of a US appeals court on Monday to overturn an earlier ruling that granted ...
The London Metal Exchange (LME) on Saturday banned from its system Russian metal produced on or after April 13 to comply ...
Iron ore futures prices drifted higher on Thursday as the latest soft data from top consumer China triggered renewed ...
The world’s coal-fired power capacity grew 2% last year, its highest annual increase since 2016, driven by new builds in ...
Peabody Energy Corp. shares sunk to the lowest in seven months after the biggest US coal miner warned that first-quarter ...
Rio Tinto said on Wednesday it is teaming up with a global venture studio and start-up investor to back the development ...
Outflows from global physically backed gold exchange traded funds (ETFs) continued for a 10th month in March, but at a ...
No comments have been posted yet ...