Mining Market

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The Chinese Molybdenum’s move to buy the Tenke deposit (South Africa) from Freeport-McMoRan, which contains the world’s largest reserves of copper and cobalt, showed how strong the desire of the Celestial Empire to provide itself with uninterrupted supplies of raw materials for battery production, writes the Financial Times.

According to CRU estimates, if the transaction on the purchase of the deposit takes place, then next year Chinese companies will gain control over 62% of the global production of cobalt, which from niche raw materials is gradually becoming one of the most important elements of the life support of the modern transportation system. According to expectations, demand for it in the next ten years will grow by two-thirds amid the active development of the electric car industry in Western countries, trying in this way to reduce harmful emissions and reduce dependence on oil imports.

Given the above, manufacturers of batteries for electric cars – from Tesla Motors to General Motors – will become increasingly dependent on China’s supply chain, the expert said.

In many ways, China follows a familiar pattern. At the turn of the millennium, the country began to provide itself with oil and industrial metal reserves: through mechanisms of purchase, investment and loans in exchange for oil (with countries such as Angola and Venezuela). But after the rare earths — which were mainly mined in China at that time — became the subject of export restrictions, the Celestial Empire’s control over raw materials aroused strategic concern between Washington and Tokyo, the newspaper writes.

Now, in order to increase the competitiveness of its car industry and reduce the environmental burden, Beijing is actively developing its own market for electric vehicles, and it needs batteries.

In the bowels of the Democratic Republic of the Congo – one of the poorest countries in the world – contains about half of the world’s cobalt reserves. Last year, Tenke, whose production potential is estimated at 25 years, produced 16,000 tons of this raw material.

“China has long regarded Congo as one of its main sources of mineral resources, including cobalt,” said Alex Vines, Africa Program Manager at Chatham House. “I always suspected that engaging with Angola was actually a test model for developing relations with Congo.”

The largest shareholders of China Molybdenum are state-owned Luoyang Mining Group and privately owned Cathay Fortune Corp, headquartered in Shanghai.

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