China’s CMOC Group has firmly established itself as the world’s leading cobalt producer, outpacing its rival Glencore by more than threefold in cobalt output, a surge that has further depressed cobalt prices.
CMOC only surpassed Glencore as the top producer last year, but recent first-half production figures reveal a widening gap.
While Glencore’s output fell by 27% to 15,900 tons, CMOC more than doubled its production to 54,024 tons, nearly reaching its full-year target.
Cobalt prices have plummeted 70% from their peak two years ago, hitting the lowest levels since 2016, as increased production far exceeds demand.
CMOC’s ramp-up of two massive mines in the Democratic Republic of Congo (DRC), where cobalt is produced as a by-product of copper, has been a key driver of this supply surge. In contrast, Glencore has scaled back its output in response to the declining prices.
“The recent production numbers from CMOC are staggering,” said Thomas Matthews, an analyst at CRU Group. “The market will likely remain in surplus until at least 2026.”
CMOC’s dominance stems from the expansion of its Tenke Fungurume mine and the rapid ramp-up of its Kisanfu project in the DRC.
The company’s output guidance for the year was between 60,000 and 70,000 tons, but it now appears poised to break the 100,000-ton mark.
Cobalt prices have collapsed from over $40 per pound in May 2022 to $11.83 as of Wednesday, according to Fastmarkets.
The supply boom continues as demand growth slows, with carmakers increasingly shifting to cobalt-free batteries, leading to a 50% reduction in cobalt use in batteries over the last three years, according to CRU.
In addition to CMOC’s projects, other major cobalt supply expansions are underway, including Jinchuan Group’s Musonoi copper project in the DRC and several projects in Indonesia led by Nickel Industries, Vale, and Zhejiang Huayou Cobalt.
