ERG, Gécamines restart copper-cobalt producer Boss Mining at time of market weakness

The phased restart will process historically mined fines from Kiwana at its Luita concession to produce copper cathodes and cobalt hydroxide over the next 16 months, they said in a statement Tuesday December 7.

The operation, which was placed on care and maintenance for more than three years at the end of February 2019, will ramp up to its full capacity by March 2023, producing on average 1,800 tonnes per month of copper cathode and 300 tpm of cobalt hydroxide.

But the restart of cobalt hydroxide production at Boss Mining adds further supply to a market where demand, especially from the chemicals and consumer electronics sector, is weak, according to Fastmarkets’ research team.

“Demand in the chemicals and consumer electronics sectors remains weak, with market participants carrying sufficient stocks and operating in a wait-and-see mode,” it said on Tuesday.

Cobalt hydroxide supply will also have to compete with alternatives such as cobalt-rich mixed hydroxide precipitate (MHP).

“We expect continued availability of supply from both the DRC and Indonesia throughout the first half of 2023,” the research team also said. “Our latest supply-and-demand forecast also considers the additional supply of cobalt via nickel matte operations in Indonesia, an area that could provide 2,000-3,000 tonnes per year of additional cobalt into the market as by-product.”

The research team forecasts a surplus of 5,000 tonnes of cobalt for 2022 and expects this surplus to increase to 15,000 tonnes in 2023.

Fastmarkets assessed its cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end) at 60-62% last Friday, unchanged from the previous session.

The payable had reached 88-90% at the start of this year before weak demand out of China due to Covid-19 lockdowns pushed it lower.

For copper, the three-month price on the London Metal Exchange opened Wednesday’s session at $8,355 per tonne. It had traded above $10,000 per tonne in March and April.

The shutdown of Boss Mining allowed both ERG and Gécamines to assess different investment paths and conduct further studies on the operation’s economics and sustainability, ERG also said.

It also highlighted in the release the environmental, social and governance (ESG) opportunities.

“Recognizing that mining plays a vital role in the social and economic upliftment of its host communities, ERG aims to develop and scale operations at Boss Mining in a sustainable way to allow for positive, longer-term social, environmental and economic outcomes,” it said.

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