China Molybdenum, world’s second-leading producer of cobalt is set to double its output to meet growing demand for the key battery material, with an eye on outstripping industry leader Swiss rival Glencore.
The firm will double output in Congo by investing $2.5 billion to start a new production line in 2023. The company bought a mining interest in the African country from a U.S. developer at the end of 2020. Other acquisitions outside of China are being explored as well.
“We expect to be No. 1 within the next few years,” a China Molybdenum communications manager said.
Demand for cobalt
China Molybdenum produced 18,000 tons of cobalt in 2018, while Glencore churned out 42,000 tons, according to the U.S. International Trade Commission. With the expansion, China Molybdenum expects to produce 34,000 tons of cobalt in Congo alone in 2023.
Founded in 1969, China Molybdenum is headquartered in Luoyang. It was a traditional state-owned enterprise controlled until it started receiving private-sector capital in 2004. The company’s investment in the mining and metals sectors has climbed to $7.2 billion in recent years, with the latest spending in Congo set to bring the total close to $10 billion.
Demand for cobalt, used as cathode material for lithium-ion batteries, is expected to roughly double from 2020 levels by 2030, data from British research firm Roskill Information Services shows, driven by the expansion of the electric-vehicle market.
Congo produced nearly 70% of the world’s mined cobalt in 2020, according to the U.S. Geological Survey. Industrial Securities predicts Chinese developers’ cobalt production in Congo will grow 60% in 2024 compared to 2020.