Weekly Metals News Digest (Feb 5-9)

Cobalt Market Dynamics

Glencore Adjusts Cobalt Production

Glencore, a major player in mining and metals, has decided to cut back on its cobalt production. This year’s output is projected to be between 35,000 and 40,000 tonnes, a reduction from last year’s 41,300 tonnes. This decision comes in the wake of declining cobalt prices observed throughout 2023 on the London Metal Exchange, with a notable decrease from $39,000 per tonne in January to $29,100 by the current period. The drop in demand, contrary to the anticipated growth, coupled with increased supply, primarily from Indonesia’s enhanced nickel-cobalt ore processing facilities, has pressured the market. Glencore’s production cut may temporarily boost prices, but the effect might not be long-lasting.

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Copper Exploration and Expansion

KoBold Metals’ Discovery in Zambia

KoBold Metals, backed by billionaires Bill Gates and Jeff Bezos, has identified a significant copper deposit in Zambia, potentially the largest in the country. The Mingomba deposit’s reserves are believed to rival those of the Kamoa-Kakula mine. Despite the optimism, geological projections can sometimes be premature. KoBold Metals employs artificial intelligence to refine its exploration techniques, aiming to reduce the margin of error. The company plans a $2 billion investment in an underground mine at Mingomba, targeting operational status early in the next decade.

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Nickel Industry Concerns

Australia Faces Production Challenges

Australia’s nickel industry is at a critical juncture, threatened by the surge in low-grade nickel production in Indonesia and China. These developments have led to a global price drop, jeopardizing Australian operations. The situation could result in the loss of 10,000 jobs and $1.8 billion in investments. Already, five mines have ceased operations since September 2023, and further closures are likely if prices do not recover.

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Aluminium Production in China

Stable Operations Despite Mixed Output

China’s aluminium industry saw a mixed start in 2024. Primary aluminium production increased by 4.2% year-over-year in January, reaching 3.6 million tonnes. However, alloy ingot production fell by 24%. China plans to maintain its aluminium production capacity at a high utilization rate, with no immediate plans for expansion, ensuring stable operations through February.

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India’s Copper Sector Growth

World’s Largest Copper Smelter by Adani Group

The Adani Group is on the verge of launching the world’s largest copper smelter in March, with an initial annual output of 500,000 tonnes of copper, eventually expanding to 1 million tonnes by 2029. This move aims to reduce India’s reliance on copper imports and support the green transition of its economy. The project represents a significant investment, promising low-cost production and high recovery rates.

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Surging Demand for Copper in India

India’s copper demand has soared, indicating a robust growth trajectory that significantly outpaces global trends. The first five months of FY 2024 saw demand and imports of copper cathodes, scrap, and rods rise sharply. Despite this surge, domestic production has struggled to keep pace, primarily due to environmental shutdowns. The commissioning of the Adani Group’s smelter is a step towards addressing this gap, but further investments and exploration are needed to fully meet India’s growing copper needs.

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