Cobalt market participants recognise the need to diversify supply chains, but doing so at a time of deteriorating pricing poses a challenge to further investment and support for the supplier nations, Kallanish hears at the Cobalt Congress in New York.

Guy-Robert Lukama, chairman of miner Gecamines in the Democratic Republic of Congo (DRC), urges congress attendees to “preserve the value of cobalt in the market” and ensure that the supply chain can “benefit from a dividend that is attributable to all the stakeholders.”

With the world’s largest cobalt deposits, the DRC accounted for 76% of global production in 2023. However, prices have dropped from $80,000/tonne in April 2022 to around $27,000/t now.

Speaking at the Cobalt Institute event, Lukama says his country is disproportionately stressed by the pricing slump. “The emergency is here [with the] flopping of prices… Each day we deplete our resources in the ground, but the investment is almost non-existent,” he adds.

All the while, miners in developing nations are asked to make improvements in the areas of environment, social and governance (ESG) priorities, but resources are slim. Lukama says the DRC government is determined to see the nation benefit from the cobalt resource it provides to the decarbonising developed world.

“If the drop in prices continues, in the Congo we will be facing profitability issues,” he laments. “The DRC doesn’t want to be just a free-trade area but wants to be an area of equity.”

During the event’s keynote address, Indonesia government official Septian Hario Seto offers advice for nations who want to diversify their sourcing of critical minerals such as cobalt. Indonesia, which is doubling its cobalt production capacity within three years, already works with partners in China, South Korea, Japan and elsewhere. Seto says the objective ultimately is to develop more value-added downstream processing in Indonesia.

“On the smelting and refining, it is very difficult to compete with China in terms of the technology,” argues Seto, deputy for investment and mining at Indonesia’s Ministry for Maritime Affairs and Investments. “Your best opportunity to diversify the supply chain is to work together with the South Korean companies.”

The Cobalt Institute says China increased its global cobalt refining share to 78% last year, while Finland and Canada accounted for 9% and 3%, respectively, of global capacity.

Jose Fernandez, undersecretary for economic growth, energy and environment in the US State Department, encourages the forging of international critical mineral agreements to aid source countries. At the same time, “we need to encourage more recycling and recovery of cobalt,” he suggests.

“Diversity of supply chain will benefit all of us,” Fernandez says. He anticipates that cobalt producers eventually will benefit from a steepening demand cycle in coming years.

“We know that market conditions are making investment difficult,” Fernandez adds. “Prices will rise in the short- and medium-term as demand continues to spike going forward.”

Fernandez adds that countries representing 55% of the world’s GDP have enrolled with the US-led Mineral Security Partnership (MSP) – an alliance that works with host governments to facilitate financial and diplomatic support for responsible growth.

Just a week before the Cobalt Congress, the MSP signed an agreement with the DRC to secure offtake and processing of the vital mineral germanium, with guarantees of technological support and economic benefits for the Congolese.

“What we are doing with germanium, we are ready to do with cobalt – in other words, diversifying our customer base,” Gecamines’ Lukama concludes.