Trends in the Mining Industry
According to PwC Global’s Mine 2023 Report, the top 40 mining companies maintained a total revenue of $711 billion in 2022, consistent with the previous year’s earnings. However, there was a shift in revenue composition, making coal even more important for revenue. Its share increased from 23% to 28%. Meanwhile, critical minerals, except for copper, constituted a smaller portion of the revenue despite increased production due to fluctuating prices.
Global cobalt demand surged to 187 kilotons in 2022, up from 166 kilotons in 2021. The Cobalt Institute reports that battery applications now account for 72% of cobalt demand, an increase from 70% in 2021. Cobalt demand is projected to exceed supply, potentially boosting prices and triggering new investments. A breakdown of cobalt demand by sector shows the electric vehicle (EV) sector as the primary consumer, accounting for 40% of total demand. Portable electronics followed with 30% of global demand, and super alloys at 9%. This trend is expected to intensify, with projections indicating that global cobalt demand will double by 2030, driven mainly by the battery requirements of the expanding EV market. Additionally, approximately $68 million was spent on cobalt exploration projects in 2022.
Given the significant demand for critical minerals and the extended time required to operationalize new mines, top mining companies in these sectors are increasingly targeted for acquisitions. Recently, there has been a shift toward complete ownership over collaborative joint ventures. For example, in December 2022, Rio Tinto Group (NYSE:RIO) acquired full control of Turquoise Hill Resources, a Canadian company, for approximately $3.1 billion. Following the acquisition, Rio Tinto Group (NYSE:RIO) held a 66% direct interest in Mongolia’s Oyu Tolgoi mine, one of the largest copper mines in the world. Additionally, Fortune Minerals, a Canadian firm, partnered with Rio Tinto to improve the extraction efficiency of cobalt and bismuth, both critical minerals. They signed a MOU to facilitate testing at Rio Tinto’s Kennecott copper mining and smelting site in Utah, as well as at Fortune Minerals’ proposed refinery in Alberta.
Notably, most of the world’s cobalt supply is derived from nickel and copper ores, where cobalt is present in trace amounts. Cobalt is recovered during the extraction and refining of these primary metals, meaning significant developments in the copper sector directly impact the cobalt supply chain.
Major Moves in the Cobalt Sector
China’s influence in the cobalt mining sector of the Democratic Republic of Congo (DRC) has been significant since the Sicomines agreement in 2007. As part of the agreement, the DRC provided mining concessions for copper and cobalt to the Chinese consortium. In exchange, the Chinese companies agreed to invest billions of dollars in infrastructure development in the DRC, including roads, hospitals, schools, and railways.
This influence has led to most DRC mines being fully or partially owned by Chinese entities. However, in 2022, DRC courts placed one of the largest cobalt mines in the world, the Tenke Fungurume Mine (TFM), owned by China’s CMOC Group Limited, under temporary administration. This action followed accusations of underreported reserves, which impacted royalty payments.
Following these developments, there was a 10-month export ban on TFM, which was lifted in April 2023. This resolution came after CMOC Group Limited reached an agreement with its DRC partners, Gécamines. The agreement involved paying $800 million to Gécamines and agreeing to pay $1.2 billion in dividends. TFM’s production is critical, representing 13% of the DRC’s and 10% of the world’s cobalt output. The resolution of this dispute could significantly impact the global cobalt market.
Additionally, Shalina Resources, which operates through its subsidiary Chemaf SA in the DRC, has a cobalt-mining capacity of 20,000 tons per annum. The company’s main cobalt mine, the Etoile mine located in Katanga, DRC, has been operational since 2007 and has a production capacity of 4,000 tons per annum. Shalina Resources and Chemaf SA have bolstered their market presence through a strategic financial and marketing partnership with Trafigura Pte. Ltd., a global leader in independent commodity trading. Established in 2022, this collaboration involved a significant $600 million investment.
This investment has been pivotal in advancing the Mutoshi mine and the Solvent Extraction-Electrowinning (SX-EW) processing plant in Kolwezi. It also supports the expansion of the Etoile SX-EW processing plant in Lubumbashi. The Mutoshi project, currently in an advanced development stage, features a fully mechanized open-pit mine and a state-of-the-art processing plant capable of producing 16,000 tons per year of cobalt in the hydroxide form. Upon completion, Mutoshi is poised to become Chemaf’s flagship cobalt operation, setting the stage for future expansions.
These developments have also had a significant impact on local employment in the DRC. The construction and operation of the Mutoshi mine have generated up to 1,000 jobs. Additionally, the ongoing operations at the Etoile mine continue to provide stable employment for about 1,000 Congolese workers, with job security extending for an additional 10-12 years, as per Chemaf SA.
Amidst these developments, the USA and the EU are seeking to reduce their dependence on China for critical minerals, including cobalt. The USA has signed a Memorandum of Understanding with the DRC and Zambia to develop electric vehicle battery chains and has strengthened its diplomatic presence in Africa. Similarly, the EU, through its Global Gateway Initiative (an approach to boosting smart, clean, and secure links in digital, energy, and transport sectors), is investing in the DRC’s critical minerals sector, positioning itself as a counterbalance to China’s Belt and Road Initiative.
The Democratic Republic of Congo is the source of over 68% of the global cobalt supply. Zambia is the 10th largest producer of copper and stands as Africa’s third major producer of cobalt. Consequently, various countries are making concerted efforts to secure these vital minerals for the rapid and necessary shift towards global energy sustainability.
We shortlisted the top cobalt mining companies in the world based on their average annual revenue. To do this, we calculated the average revenue of these companies over three years, from 2020 to 2022, and ranked them in ascending order according to their revenue. Then, we conducted separate research to identify the cobalt mines these companies operate or own in order to better explain their operations.
10. Panoramic Resources Limited
Average Annual Revenue: $99.3 million
Panoramic Resources Ltd is a diversified metal and mining company based in Australia, focused on exploring and developing nickel, cobalt, and copper resources. The company wholly owns the Savannah nickel-copper-cobalt project, which includes the Savannah North site in East Kimberley, Western Australia. This project primarily serves industries such as automotive, solar power, electronic devices, and electric vehicles by producing materials for lithium-ion batteries and other battery products.
The Savannah Mine, rich in nickel, copper, and cobalt sulfide ore, is located in the Kimberley region of northern Western Australia. It opened in 2004, initially with an open pit mine for the first 18 months before transitioning to underground mining. However, operations ceased in 2015 due to lower nickel prices. The significant discovery of the Savannah North deposit in 2015 led to the resumption of operations in 2018. After a comprehensive technical and commercial assessment, the mine’s operations resumed in 2021, projecting an initial 12-year lifespan with potential for extension. In FY 2023 (which ended in September 2023), the mine produced 368 tons of cobalt, an increase from 258 tons in FY 2022, positioning it among the major cobalt mining companies.
9. Sherritt International Corporation
Average Annual Revenue: $135 million
Sherritt International Corp, a Canadian company, mines and refines nickel and cobalt from lateritic ores. The company’s key venture is the Moa Joint Venture, a significant operation mining and refining nickel from laterite sources in Moa, Cuba, and Fort Saskatchewan, Alberta, Canada. This venture, co-owned equally by Sherritt and the General Nickel Company S.A. of Cuba, produces class I nickel and high-grade cobalt products, boasting a history of over 25 years. In Q3 2023, the company’s revenue reached $36 million, marking an increase from $30 million in the same period the previous year.
The Moa Joint Venture employs an open-pit mining process to extract lateritic ore. The ore is then subjected to high-pressure acid leaching on-site, producing mixed sulfides containing nickel and cobalt. These sulfides are transported to Fort Saskatchewan for refinement into high-quality nickel and cobalt alongside ammonium sulfate fertilizer as a by-product. Sherritt, as a leading producer of finished cobalt with 99.9% purity, plays a critical role in meeting global demand. Most of the company’s cobalt production is a by-product of nickel mining, in line with the global trend where cobalt production typically accompanies the mining of other metals.
8. Jinchuan Group International Resources Co. Ltd
Average Annual Revenue: $784 million
Jinchuan Group International Resources Co. Ltd, an investment holding company, ranks among the largest cobalt mining companies due to its engagement in mining operations and metal trading. It operates in two segments: trading of mineral and metal products and mining operations focusing primarily on copper and cobalt production.
Jinchuan International currently operates three mines in the Central African Copperbelt. These are the Ruashi copper and cobalt mine and the Kinsenda copper mine in the Democratic Republic of Congo, along with the Chibuluma copper mine in Zambia. Additionally, Jinchuan International owns a construction project (Musonoi project) and an exploration project (Lubembe project) in the DRC, laying a foundation for the company’s future growth.
Moreover, Jinchuan Group has become a major base for nickel and cobalt production in China, operating one of the world’s third-largest sulfide nickel and copper deposits. The company’s global expansion includes ten overseas non-ferrous metal mines in countries such as South Africa, DR Congo, Zambia, Mexico, and Indonesia. With an annual production capacity of 200,000 metric tons of nickel, 1 million tons of copper, and 15,000 tons of cobalt, Jinchuan’s production ranks third and fourth in the world for nickel and cobalt, respectively, according to the latest data.
7. Wheaton Precious Metals Corp
Average Annual Revenue: $1.1 billion
Wheaton Precious Metals Corp (NYSE:WPM), a Canadian company, is among the leading cobalt mining companies due to its expansive operations. Its portfolio encompasses diverse projects in various countries, including Mexico, Peru, Canada, Sweden, Brazil, and the United States. In 2018, Wheaton Precious Metals Corp (NYSE:WPM) finalized an agreement with a subsidiary of Vale S.A. (NYSE:VALE) to purchase a fixed percentage of cobalt produced at the Voisey’s Bay mine, known as the Cobalt Stream.
This agreement involved an upfront payment of US$390 million by Wheaton to Vale, along with subsequent payments at 18% of the spot price per pound of delivered cobalt. Effective from January 1, 2021, Wheaton is entitled to 42.4% of the Voisey Bay mine’s cobalt output until 31 million pounds have been delivered, and thereafter 21.2% for the remainder of the mine’s lifespan. The Voisey’s Bay mine is recognized as a low-cost, high-margin nickel mine, well-positioned on the global nickel cost curve. This deal further strengthens Wheaton’s strategic partnership with Vale S.A. (NYSE:VALE), one of the top cobalt mining companies.
6. Zhejiang Huayou Cobalt Co., Ltd
Average Annual Revenue: $5.5 billion
Zhejiang Huayou Cobalt Co., Ltd, established in 2002, is a prominent China-based company specializing in developing and manufacturing lithium battery materials and new cobalt material products. The company operates in three main sectors: the new energy business, the non-ferrous sector, and the resources sector, dedicated to mining, selecting, and primary processing of non-ferrous metals such as cobalt, nickel, and copper. Huayou’s cobalt production is expected to reach 23,000 tons by 2024.
Expanding its global footprint, Huayou recently acquired the Arcadia hard-rock lithium mine in Zimbabwe for $422 million. This acquisition is part of Huayou’s strategy to secure battery mineral resources to meet the growing demand from the electric vehicle (EV) sector. The Arcadia project aims to process 2.4 million tonnes of ore annually, although it has not yet reached commercial production.
Furthering its ambitions in the battery materials sector, Huayou has invested in a $2.1 billion nickel and cobalt project in Indonesia, holding a 20% stake in the venture. This project, located at Weda Bay on Halmahera Island, is set to produce 120,000 tonnes of nickel and 15,000 tonnes of cobalt annually. Notably, the company also holds the PE527 copper-cobalt mining permit in the Democratic Republic of Congo.
5. Eurasian Resources Group
Average Annual Revenue: $7.4 billion
Eurasian Resources Group (ERG) operates mining activities in the Democratic Republic of Congo (DRC). Its portfolio features the Metalkol RTR project, a significant cobalt production facility in the DRC. As one of the world’s largest cobalt projects, Metalkol RTR has the capacity to produce substantial amounts of cobalt annually, placing ERG among the top cobalt mining companies. In 2020, Metalkol RTR reached its full Phase 1 production capacity and completed the construction of Phase 2, thereby enhancing its production capabilities. By 2021, the facility had reached its designed cobalt production capacity, surpassing production targets. It produced 20,718 tonnes of cobalt and 94,807 tonnes of copper, exceeding the expected output for both commodities. In 2022, cobalt, copper, and other non-ferrous materials contributed $2392 million to the company’s total revenue.
To expand its operations, Eurasian Resources Group, with support from Kazakhstan, plans to rejuvenate its Comide copper and cobalt operation in the Democratic Republic of Congo through an $800 million investment, targeting the growing market for green-energy minerals. Eurasian Resources Group has announced plans to complete a new hydrometallurgical facility at Comide by 2025. The initial phases aim to produce 40,000 tons of copper cathode and 7,000 tons of cobalt hydroxide annually, with plans to double this output in the third phase.
Additionally, ERG recently entered a five-year agreement, starting in 2026, to supply cobalt to EVelution Energy, a US-based electric vehicle battery materials producer. Under this agreement, ERG will provide cobalt hydroxide feedstock, equivalent to around 3000 metric tons of contained cobalt to EVelution annually.
This deal is in line with the surge in investments in the US electric vehicle battery supply chain, significantly boosted by President Joe Biden’s Inflation Reduction Act (IRA). The IRA has invested billions of dollars in green energy tax credits to reduce carbon emissions in the United States.
4. CMOC Group Limited
Average Annual Revenue: $21.3 billion
CMOC Group Limited, previously known as China Molybdenum Company Limited, is Mainland China’s largest molybdenum producer and ranks among the largest cobalt mining companies. Additionally, CMOC is a leading tungsten producer, the second-largest producer of cobalt and niobium, and a significant copper producer. In the Democratic Republic of Congo, CMOC holds an 80% stake in the Tenke Fungurume Mine, acquired in 2016 for $2.65 billion.
In 2020, the company purchased a 95% stake in the Kisanfu mine in the DRC from Freeport-McMoRan Inc (NYSE:FCX) for $550 million, which produces copper and cobalt. In 2022, CMOC Group Limited successfully maintained stable production and operations, largely meeting its production targets. Notably, in the DRC, the company achieved a significant increase in cobalt production, with volumes reaching 20,286 tonnes, marking a year-on-year growth of about 10%. CMOC Group has recently resolved a 10-month-long dispute at the Tenke Fungurume mine, which had halted exports due to royalty payment issues. The company has resumed exporting copper and cobalt from its TFM mine in the DRC, as confirmed in April 2023, following the resolution of the dispute with the state miner.
3. Vale S.A.
Average Annual Revenue: $47.8 billion
Vale S.A. (NYSE:VALE) is a major producer and exporter of various minerals, including iron ore, pellets, nickel, manganese ore, copper, ferroalloys, coal, and, notably, cobalt. The company also produces platinum-group metals (PGMs) and precious metals like gold and silver. In cobalt mining, Vale’s operations are particularly significant in Canada. In 2022, Vale S.A. produced a total of 2,434 metric tons of cobalt, primarily sourced from its nickel mines in Sudbury, Thompson, and Voisey’s Bay.
The Voisey’s Bay cobalt project in Labrador, which commenced operations in 2005, is noteworthy for its fly-in/fly-out operation model (used in remote mining locations where workers are flown into the mine site for their work period and then flown out to their home). Therefore, this model requires extensive infrastructure to support the mine and its workers. Vale S.A. (NYSE:VALE) has also established positive relationships with local Indigenous communities, implementing employment commitments. Employing around 500 people, Voisey’s Bay is currently undergoing an expansion to include underground mining, a development expected to increase employment.
2. Glencore plc
Average Annual Revenue: $200.6 billion
Glencore Plc (LSE:GLEN) is a global leader in both the production and marketing of cobalt, with its 2022 output of the metal totaling 43.8 kilotons. The company’s activities in cobalt extraction and processing span multiple continents, with operations in the Democratic Republic of the Congo (DRC), Australia, Canada, and Norway. In the DRC, Glencore’s significant operations include the Kamoto Copper Company (KCC) and Mutanda Mining, both situated in Lualaba Province and producing cobalt hydroxide and copper cathodes.
In Australia, Glencore plc (LSE:GLEN) operates the Murrin Murrin nickel-cobalt mine in Western Australia, noted for producing refined nickel and cobalt metal. Norway houses Glencore’s Nikkelverk, which also produces high-quality cobalt and copper cathodes. In Canada, the company runs the Raglan Mine in northern Quebec, one of the world’s richest base-metal mines, and the Sudbury Integrated Nickel Operations in northern Ontario, which include a smelter.
Regarding cobalt production, China’s CMOC Group Limited is poised to surpass Glencore Plc as the leading global cobalt producer this year, driven by the growing demand for critical metals in green energy. CMOC Group aims to challenge Glencore’s current leadership by planning to double its production by year’s end. This anticipated increase is due to the introduction of a new, large-scale mine in the Congo, expected to commence operation in the second quarter. As reported by Bloomberg, this development is likely to position CMOC above Glencore in cobalt production.
1. Norilsk Nickel
Average Annual Revenue: $400 billion
Norilsk Nickel, also known as Nornickel, is a leading force in Russia’s metals and mining industry. It is renowned as the largest producer of high-grade nickel and palladium and is also one of the largest producers of platinum and copper. The company’s extensive product portfolio includes cobalt, rhodium, silver, gold, and other precious metals. Located in the Russian High Arctic, the Norilsk mining center encompasses a full production cycle from ore mining and concentration to refining. This center operates the Severny copper mine in Russia, where cobalt is a significant by-product of copper production. In 2022, the Norilsk Division produced a total of 18.4 million tons of ore.
Norilsk Nickel’s Siberian operations include two ore concentrators capable of treating 11Mt/y of ore and smelters with a combined capacity of 350,000t of copper and 160,000t of nickel. The company has invested significantly in its Kola plant, including constructing a facility for producing cobalt electrolytes, emphasizing its commitment to cobalt production. Nickel cathode production at Norilsk’s Tankhouse 1 and Tankhouse 2 results in primary cobalt cake, which is used in the cobalt section to produce saleable cobalt concentrate and cobalt cathodes. This underlines Norilsk Nickel’s key role in the cobalt industry.
Source: finance yahoo