China's Dominance in Cobalt Refinement: Unveiling the Reign of the DRC as the King of Cobalt Mines

In the current market, the Democratic Republic of Congo (DRC) maintains a dominant position, commanding more than 70% of the market share in cobalt mining production and reserves.

Simultaneously, the subdued demand for cobalt coincided with a surge in supply as several mines resumed production in 2021 and 2022. Notably, Glencore successfully reopened the Mutanda mine in the DRC, which had been suspended since 2019, and fully resumed operations in 2022. In December 2022, Eurasian Resources Group and Gécamines, the national mining company of the DRC, also restarted operations at the Boss mine, which had been suspended since 2019. Furthermore, exports from the Tenke Fungurume mine, blocked since July 2022, resumed in April 2023 after China's CMOC and Gécamines settled a royalty dispute. As a result, cobalt supply from mining saw a significant upswing in 2022, growing by 20%, resulting in a considerable surplus in the market by year-end.

The Democratic Republic of Congo maintained its strong position as the world's leading cobalt producer in 2022, accounting for over 70% of global production. Meanwhile, Indonesia emerged as the second-largest supplier of mined cobalt in 2022, tripling its cobalt production with the launch of new HPAL projects. In a significant development, the United States marked its first cobalt production since 1994 as production commenced at the Idaho Cobalt Operations in October 2022. However, due to a lack of domestic processing capabilities, these ores are slated for export.

With a robust pipeline of projects in the Democratic Republic of Congo and Indonesia, and in light of the currently restrained price conditions, the dominance of these two countries in global cobalt supplies is expected to persist. Meanwhile, China continues to maintain a stronghold in refined cobalt product supplies, accounting for over 75% of refined cobalt output in 2022.

Looking ahead to the remainder of 2023, cobalt prices are projected to remain suppressed due to oversupply. The Democratic Republic of Congo is expected to further increase its production, with CMOC, the world's second-largest cobalt producer, scheduled to commence production at the Kisanfu mine in 2023. Indonesia is set to contribute more volumes to the market as the country produces cobalt as a by-product of its growing nickel industry.

Cobalt reserves

The United States boasts an estimated 1 million tons of identified cobalt resources, with Minnesota as the primary source. Other significant deposits are found in Alaska, California, Idaho, Michigan, Missouri, Montana, Oregon, and Pennsylvania. It's worth noting that except for Idaho and Missouri, any potential cobalt production from these sites would likely be a byproduct of other metal extraction. Globally, terrestrial cobalt resources total around 25 million tons.

The majority of these resources are concentrated in sediment-hosted stratiform copper deposits within Congo (Kinshasa) and Zambia, nickel-bearing laterite deposits in Australia and nearby island nations, as well as Cuba. Additionally, significant resources can be found in magmatic nickel-copper sulfide deposits located in mafic and ultramafic rock formations in Australia, Canada, Russia, and the United States. An astonishing 120 million tons of cobalt resources have been identified in polymetallic nodules and crusts on the ocean floors of the Atlantic, Indian, and Pacific Oceans.