Weekly Metals News Digest – August 19-23
Ganfeng Lithium Expands into Turkey
Strategic Partnership with Yigit Aku
Chinese lithium producer Ganfeng Lithium has embarked on a significant expansion into Turkey by forming a long-term strategic partnership with Turkish battery manufacturer Yigit Aku. This collaboration marks a crucial step in Ganfeng Lithium’s global growth strategy, particularly in the rapidly expanding battery market.
Joint Venture in India
As part of their partnership, Ganfeng Lithium and Yigit Aku have agreed to establish a joint venture in India with a substantial investment of $500 million. The venture will focus on the production of lithium-ion batteries, with an initial capacity of 5 GWh. This move positions both companies to capitalize on the growing demand for lithium-ion batteries in the region, driven by the increasing adoption of electric vehicles (EVs) and energy storage systems.
R&D Center for Advanced Battery Technologies
In addition to the production facility, Ganfeng Lithium and Yigit Aku plan to set up a research and development (R&D) center dedicated to developing advanced lithium-ion battery technologies, including solid-state batteries. These innovations are expected to play a pivotal role in the future of energy storage, offering higher energy densities, improved safety, and longer lifespans compared to traditional lithium-ion batteries.
Global Reach and Influence
Ganfeng Lithium is currently the world’s second-largest lithium producer, with active projects in Argentina, Australia, Congo, Mexico, and other countries. Yigit Aku, with four battery manufacturing facilities and over 500 customers in 100 countries, complements Ganfeng’s global ambitions. The partnership between these two companies is set to enhance their positions in the competitive battery market.
The Global Copper Surplus Triples in 2024
Market Dynamics and Surplus Growth
The global copper market has seen a significant increase in surplus during the first half of 2024, with the surplus more than tripling compared to the same period in 2023, reaching 488,000 tons. This increase is largely due to a 6.2% rise in global copper production, which reached nearly 13.9 million tons, outpacing the 3.4% growth in consumption, which stood at 11.2 million tons.
Monthly Variations and Regional Differences
In June 2024 alone, the copper surplus grew to 95,000 tons, up from 63,000 tons in May. Global copper output fell by 2.6% to 2.3 million tons in June, while demand dropped by 4% to 2.2 million tons. These contradictory figures highlight the complex dynamics of copper production in different countries. For instance, copper production in China expanded by 7% in the first half of the year, while the Democratic Republic of Congo (DRC) saw a 12% increase. In contrast, production in Chile remained stagnant.
Consumption Trends and Stockpiling
Copper consumption has decreased in major markets such as the United States, Japan, and the European Union, while China saw a modest 3.5% growth in consumption during the first half of 2024. Meanwhile, copper stocks in key global exchanges increased by 162% to approximately 560,000 tons, reflecting the market’s oversupply.
Glencore Increases Zinc Production
Strategic Production Increase
International mining and metallurgical giant Glencore reported a 27% increase in zinc production, totaling 440,100 tons by the end of the first half of 2024. This increase was driven by favorable pricing on the London Metal Exchange (LME), where zinc prices rose from $2,400-$2,500 per ton in January to $2,700-$2,800 per ton in June.
Operational Changes and Challenges
Glencore’s improved production dynamics were also supported by significant operational changes, including the integration of Canada Electrolytic Zinc into its operations last year and the February 2024 restart of the Nordenham plant in Germany, which had been idle since November 2022 due to high electricity costs. Despite these achievements, Glencore faced challenges in securing raw material supplies for its zinc smelters, leading to increased procurement costs.
Global Market Influence
The surge in zinc prices was largely driven by increased imports to China, the world’s largest consumer of zinc, which imported 180,000 tons in the first half of 2024. This demand from China has been a key factor in supporting higher prices on the LME, benefiting producers like Glencore.
Sibanye-Stillwater Secures Green Loan for Finnish Lithium Project
Financing for the Keliber Project
South African mining company Sibanye-Stillwater has secured a €500 million syndicated green loan to finance its Keliber lithium project in Finland. This loan will fund the construction of a vertically integrated mining and smelting complex, which will include several lithium mining, beneficiation, and processing facilities.
Project Scope and Timeline
The Keliber project is expected to produce approximately 15,000 tons of battery-grade lithium hydroxide annually for at least 15 years. The project is based on inferred resources of 19.7 million tons of ore with an average grade of 1.21% lithium oxide and reserves of 9.7 million tons with an average grade of 0.96%. Sibanye-Stillwater plans to launch the mining and smelting complex next year, with total capital investments in the project estimated at €667 million.
Strategic Diversification
Traditionally known for its platinum and palladium production, Sibanye-Stillwater is diversifying into the lithium sector to capitalize on the growing demand for battery materials. The Keliber project represents a significant step in this diversification strategy, positioning the company as a key player in the global lithium market.
Cobalt Surplus Continues to Grow
Increased Stockpiles and Price Decline
The global surplus of cobalt continues to expand, with the London Metal Exchange (LME) recently receiving a new 23-tonne shipment of warranted cobalt, the first since February 2022. Additionally, LME warehouses currently hold more than 680 tons of unsecured cobalt. This increase in stockpiles reflects the significant oversupply in the market, driven by production growth in Indonesia and the DRC, where cobalt is often produced as a by-product of nickel and copper mining.
Price Trends and Government Interventions
Cobalt prices have seen a steep decline from their peak of $82,000 per ton in March 2022 to around $24,000 per ton. Despite efforts by some governments, such as China’s purchase of 8,700 tons of cobalt for state reserves in 2023, the surplus in the global market remains substantial. China plans to purchase another 15,000 tons in 2024, but these measures are unlikely to significantly reduce the cobalt surplus.
Forecast: Continued Weakness in the Copper Market Amid Production Growth
Price Fluctuations and Market Surplus
Global copper prices have struggled to recover after a sharp decline since May 2024, currently trading in the range of $9,100-$9,200 per ton. Despite this, the copper surplus persists, with the International Copper Study Group forecasting a surplus of 162,000 tons in 2024, potentially rising even higher. The surplus is expected to decrease slightly to 94,000 tons in 2025, but ongoing market conditions suggest that these estimates may need to be revised upward.
Production Growth Despite Market Challenges
Despite the persistent surplus, copper production is expected to continue growing in the coming years. For example, Canadian mining giant Barrick Gold plans to increase its copper output to 400,000 tons by 2030 through expansion projects at the Lumwana mine in Zambia and the development of the Reko Diq deposit in Pakistan. Barrick also holds copper assets in Saudi Arabia and Chile and is exploring opportunities in the Central African Copper Belt, the United States, Ecuador, and Peru.
Industry Outlook
Other major players, such as Ivanhoe Mines, are also expanding their copper production capabilities, notably completing the third stage of expansion at the Kamoa-Kakula copper mine in the DRC. These developments indicate that copper output will likely increase in the coming years, driven by demand from the energy sector (both conventional and renewable) and the growing electric vehicle industry.
