MMG has halted operations at its cobalt processing plant in the DRC due to a slump in cobalt prices and a government export ban. This decision follows a significant investment aimed at boosting production. The DRC has seen increased cobalt production leading to oversupply, prompting the government to impose new regulations. MMG plans to enhance copper production while adopting a flexible approach to cobalt operations.
MMG, a state-controlled mining entity from China, has ceased operations at its cobalt processing plant located at the Kinsevere mine in the Democratic Republic of Congo (DRC). This decision followed a significant decline in cobalt prices and a recent export ban imposed by the Congolese government, according to reports from Bloomberg. The suspension occurred shortly after the facility’s opening in December 2024, highlighting adverse market conditions for cobalt, essential for electric vehicle batteries.
The investment into the Kinsevere project by MMG reached approximately $600 million, aimed at enhancing copper output and initiating cobalt production. Despite this substantial investment, the cobalt processing facility was shifted to care and maintenance shortly after commissioning, which commenced in September 2023.
The DRC, a notable cobalt producer, has recently experienced increased production levels, particularly from China’s CMOC Group. This surge has resulted in an oversupply of cobalt, leading to falling prices. In an effort to manage this oversupply and gain more control over pricing, the Congolese government implemented a four-month export ban last month.
A spokesperson for MMG stated the company’s commitment to a “flexible production strategy,” indicating that cobalt operations will be resumed based on market price evaluations. Concurrently, MMG plans to enhance copper production by a minimum of 40% this year. In the previous year, MMG reported producing 1,600 tonnes of cobalt and 380,000 tonnes of copper across its global operations, with its primary asset being the Las Bambas mine in Peru.
Moreover, the DRC has launched a state monopoly to oversee artisanal cobalt production and export. Under new regulations, the state-owned Entreprise Generale du Cobalt has been granted exclusive rights to export hand-dug cobalt from the DRC.
In conclusion, MMG’s suspension of cobalt operations at the Kinsevere mine underscores the challenges posed by declining prices and regulatory changes in the DRC. The strategic shift towards maintaining a flexible production strategy demonstrates MMG’s adaptability in navigating adverse market conditions while simultaneously aiming to ramp up copper production. The Congolese government’s recent regulations further complicate the cobalt export landscape, emphasizing the need for ongoing adjustments in the industry.
Original Source: www.mining-technology.com
