Eurasian Resources Group S.a.r.l. plans to use a $2.2 billion project in the Democratic Republic of Congo to become the world’s top cobalt producer and tap growing demand for batteries from companies including Tesla Motors Inc.
ERG, which earlier this month agreed on $700 million of Chinese funding for the project, has started construction and aims to complete it within 20 months, according to Chief Executive Officer Benedikt Sobotka.
He sees the company becoming the largest cobalt producer when full capacity is reached. Chinese producers currently vie with each other for the top spot.
Cobalt prices should advance “significantly” in the next two years as demand for the metal used in rechargeable batteries increases, Sobotka said. The battery market is expanding as more consumers turn to electric and hybrid cars and look to store renewable energy to power appliances when there’s little wind or sunshine. Daimler AG and Tesla said they plan to sell batteries storing energy to homeowners and businesses.
“Given that companies such as Tesla are expanding and increasing the use of batteries, our project has very good prospects,” Sobotka said in an interview last week.
Luxembourg-registered ERG owns Eurasian Natural Resources Corp., which delisted shares in London in 2013 amid a fraud probe. It controls assets in Kazakhstan, Europe, Africa and Brazil and is 40 percent owned by the Kazakh government with the remaining held by private investors.
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