As a critical mineral, cobalt is one of the keys to the exploding Electric Vehicle (EV) and electrification technology markets. Famed for its striking blue pigment, Cobalt Blue, the ‘Co’ element has evolved from a thing of beauty to a vital technology enabler.
Australia is the fourth largest producer of cobalt, with one of the world’s largest in-ground reserves and a proven mining industry set up to support it. Perhaps surprisingly, the world’s cobalt behemoth, with about 70% of the total cobalt supply, is the Democratic Republic of Congo or the DRC.
The DRC exports around 130,000 tonnes of cobalt per annum, compared to Australia’s exports of just 6,000 tonnes, which gives a sense of its market dominance.
Cobalt translates from German as ‘Goblin’ due to its noxious odour.
Classified as a semi-rare metal, cobalt is almost wholly derived as a byproduct of nickel and copper mining. A full 98% of cobalt is produced at nickel and copper mines, which account for about 38 and 60% of global output, respectively.
Roughly 9 kilos of cobalt is needed to manufacture a lithium-ion EV battery, although some contain up to 20 kilograms.
With such a high and growing demand for the resource, many people are looking for long-term cobalt investments, for which Australian operators are in the box seat. Possessing 18% of global cobalt reserves while responsible for only about 3% of global cobalt output, Australia has a long cobalt runaway ahead of it.
Are environmental regulations, health and safety concerns or potential profit loss a concern right now?
And with endemic problems in the DRC’s industry, we may be on the cusp of a cobalt boom Down Under.
The Changing Face of Cobalt Mining
A cobalt powerhouse, the DRC has reigned supreme for decades, but it is facing a finite supply and international pressure regarding how it mines its resources. Critics of the industry highlight concerns over child labour and lax environmental standards in the African nation, which creates a less-than-ideal investment climate in today’s world.
Used in high technology that requires significant capital outlay and high industry standards, the DRC’s dominance may soon start to dwindle.
Cobalt is vital in many alloys, including for gas turbine engines and magnets.
It’s also found in exceptionally robust cobalt alloys used to cut and drill steel, like tungsten carbide and chromium-cobalt. However, after transforming from cosmetic to practical uses in the early 1900s, cobalt’s demand is now driven by emergent EVs and global electrification technology.
A boom that’s just beginning.
Per the Australian government’s Critical Minerals Strategy 2023-2030, the need for cobalt could rise 20fold by 2040.
And while prices in early 2024 remain deflated, the future of Australia’s cobalt mining industry looks rosy. Australia is positioning itself as a significant world player with the potential to scale up its cobalt production slowly and sustainably.
One key to Australia’s success in its critical minerals portfolio is the ability to value-add or refine resources rather than simply shipping them in dry bulk. This approach also applies to cobalt, with many of Australia’s premier miners and producers looking to enter the market further downstream with improved products.
But who are these players, and what’s the state of the local industry?
Exploring Australian Cobalt Operators
According to the latest research, Australia has about 70 cobalt-focused projects.
Here are some of the most notable Australian cobalt mining players and projects at a glance:
- Glencore
Mining major Glencore owns the most extensive operation, the Murrin Murrin nickel-cobalt mine in the Northeastern Goldfields region of Western Australia. Murrin Murrin employs conventional open-pit mining to extract resources, processing and refining cobalt ore on-site while providing over half of Australia’s total production.
A global company, Glencore produces around 22,000 tonnes of cobalt annually across its worldwide operations, including those in the DRC. It also processes and recycles cobalt-containing materials.
- Cobalt Blue
Cobalt Blue Holdings owns the Broken Hill project in New South Wales, which strongly emphasises cobalt produced directly on-site rather than extracted as a nickel by-product. New South Wales’ Critical Minerals and High-tech Metals Strategy promotes exploring and developing “critical minerals,” including cobalt.
Cobalt Blue is also in the process of planning a strategically important Kwinana, Western Australia, cobalt-nickel refinery with a capacity of 3,000 tonnes per year of cobalt sulphate and 1,000 tonnes of nickel sulphate.
- Ardea Resources
Ardea Resources is attractive due to its wholly owned Kalgoorlie nickel project, which, according to the company, “hosts the largest nickel-cobalt resource in the developed world.”
The project includes the Goongarrie Hub deposit, with an estimated ore reserve of 99,000 tonnes of contained cobalt and 1.36 million tonnes of contained nickel. This resource would support open-pit mining with a 40-year mine life and annual output of 2,000 tonnes of cobalt and 30,000 tonnes of nickel.
Summary and the Outlook for Australian Cobalt Miners
As we’ve seen, the cobalt element has had many uses and even reinventions since its introduction as a prized pigment. Initially disregarded as a stinky ‘Goblin’ by miners searching for gold and silver, ‘Co’ has risen to become one of the world’s most crucial resources in the energy transition.
While the price of cobalt, alongside many other critical minerals including lithium, undergoes a ‘price correction’ the predictions are that future demand will be high, very high. This makes Australia a prime candidate as a premier cobalt supplier, based on its existing mining network and the DRC’s eventual decline as a producer.
However, more must be done to ensure that the industry is profitable by adding value and refining cobalt where possible to upgrade the product offerings. With the right strategy, Australia’s current and prospective cobalt miners are in a position to enjoy the element’s rise as the years progress and electrified technology develop.
Dust suppression is a critical issue in the world of mining and resources.
Learn more about GRT’s industry-leading and IoT-connected SMART Dosing Units, and discover how we’re driving better dust suppression solutions for all!
If you’d like to talk with an expert, simply contact us!
Your feedback is important to us.
If you enjoyed reading this Global Road Technology industry update and found it informative, please let us know by leaving a REVIEW
References:
https://investingnews.com/cobalt-in-australia/
https://investingnews.com/biggest-cobalt-stocks-asx/
https://www.mining.com/web/miners-find-out-the-hard-way-why-cobalt-is-called-the-goblin/
