Most cobalt producers are likely experiencing losses on every ton of cobalt due to a price slump in the market, according to Benedikt Sobotka, CEO of Eurasian Resources Group (ERG).
Despite the challenging conditions, Chinese-owned companies are aggressively expanding cobalt mining operations in Congo and Indonesia, aiming to secure a larger market share for the metal crucial in electric vehicle (EV) batteries.
Sobotka, speaking at the World Economic Forum in Davos, noted that cobalt had a challenging year in 2023, with a lack of supplier discipline contributing to the market’s downturn.
However, he emphasized that the market fundamentals remained strong, driven by the increasing global penetration rates of electric vehicles.
ERG, a metals miner with assets in Kazakhstan, the Democratic Republic of Congo, and Brazil, produces cobalt, copper, aluminum, and ferroalloys.
In 2022, the company reported underlying EBITDA of $3.4 billion and free cash flow of $481 million.
Addressing shipping disruptions in the Red Sea, Sobotka stated that ERG was not significantly affected, highlighting that disruptions in the Malacca Strait would have had a more substantial impact.
Looking ahead, Sobotka predicted a potential uptick in mergers and acquisitions (M&A) in the mining industry this year. However, he stopped short of confirming ERG’s participation in any deals
