COMMENT: Beware misinformation in marketing campaigns
As the cobalt industry moves to clear up the confusion that has led to the minor metal being wrongly described as a conflict mineral, fanciful marketing campaigns and misinformation are not helping matters
As the cobalt industry moves to clear up the confusion that has led to the minor metal being wrongly described as a conflict mineral, fanciful marketing campaigns and misinformation are not helping matters.
Cobalt is not included in legislation being passed by the US Securities & Exchange Commission, nor in accompanying industry stipulations, which aim to improve transparency in the mineral supply chain from central Africa.
Western tantalum producers have long been accused of capitalising on new regulations and industry stipulations around the trade of material from conflict zones in the DRC. Critics say they are using the conflict to tout their own material and justify higher prices, at the expense of artisanal miners whose livelihoods will be put at risk if mining stops.
Right or wrong, tantalum miners outside the DRC have a point – they can trace their material back to a safe origin and consumers are prepared to pay a premium for this assurance, knowing it will help them comply with the new rules.
But Puget Ventures, a Toronto-listed miner in the process of changing its name to Global Cobalt Corp, has opportunistically attempted to position itself similarly.
It says it is in “a unique position as being a front-runner in supplying non-African and non-conflict cobalt to the ever-growing global demand for the strategic metal”.
It also wrongly refers to the entire DRC as a conflict area.
But there is no such thing as conflict cobalt, so talk about conflict-free cobalt is a nullity.
Puget is a marginal player at the moment. It is not in production, but is developing projects.
In marketing itself in this way, Puget adds to the confusion that causes buyers to wrongly associate cobalt with conflict, damaging the cobalt industry itself, producers, traders and consumers alike.
It is noise that the market should cut through with a clear message. The CDI has moved to clarify the matter and has been joined in doing so by major participants in the market such as Darton Commodities, Umicore and ENRC.
Most major traders have had to allay customer concerns by explaining that cobalt does not come from the DRC conflict zones, they said.
“I don’t think consumers understand the implications of saying they don’t want a gram of DRC cobalt; they are closing out up to 85% of the world’s supply,” one trader said.