Fortune Minerals : Cobalt News

Fastmarkets - January 18, 2023

The mining sector will need to get over its reticence to operate in jurisdictions with high-risk profiles in order to achieve the growth required for the move to a new generation of energy markets

Speaking in an interview with Fastmarkets on Thursday January 11, Benedikt Sobotka, chief executive officer of Eurasian Resources Group (ERG) said that while large, listed miners have historically turned to perceived lower-risk environments such as Canada and Australia, this will need to change because there are vast resources outside those countries…"But those riskier jurisdictions are where the growth has to happen, because it is now harder to quickly develop large deposits in Canada, Australia and so on. We have to be able to work in jurisdictions that are more complicated," he added…Sobotka said that securing permits to develop projects is a protracted and lengthy process, even more so in established regions, which is a key reason why the industry cannot get the required volumes from those jurisdictions…It comes down to political will, he noted. He cited the example of Germany, which realized it needed to diversify its gas supply away from Russia, taking 250 days to build a regasification terminal instead of the traditional six to seven years…Copper and cobalt are among Sobotka's top picks for 2023. Meanwhile, the incremental demand for cobalt and lithium relative to the contemporary supply base will likely create a deficit, he told Fastmarkets…Sobotka forecast a surge in demand for cobalt, used in batteries for EVs, while its supply faces huge downside risks, a situation he said could quickly transition from a moderate surplus to a deficit in 2023. Total demand for cobalt in the next five years will be higher than all cobalt consumed in the first two decades of this century, he estimated…"Over the next 10 years, the world will need at least 20 more cobalt production facilities of a similar size to Metalkol RTR, to meet growing demand for critical minerals," he said, referring to the company's operation in the DRC…"As part of this effort, ERG is doubling its cobalt production over the next four years," he told Fastmarkets, noting that ERG has three development projects that will deliver an additional 20,000 tonnes of cobalt…Despite the uncertainty over the outlook for the global economy, Sobotka said he remains optimistic that the metals markets are going to enter a phase of fundamentally higher prices…"The question is, how quickly is the Chinese [growth] machine going to run again? If it does resume rapidly, it's going to be a big supply shock," he told Fastmarkets…"We're not seeing much restocking - maybe a little bit in copper - but once the Chinese have the confidence the opening is for the long term, you'll see a lot of restocking that will drive prices up, and that could go very high, very quickly," he added.