COLUMN-Glencore’s radioactive shock for the cobalt market – by Andy Home (Reuters U.S. – November 9, 2018)

LONDON, Nov 9 (Reuters) – Glencore’s Katanga mine in the Democratic Republic of Congo (DRC) was supposed to transform the cobalt market. After two years of being offline, Katanga’s ramp-up was going to add 11,000 tonnes to global supply this year. The surge, equivalent to 10 percent of world production last year, would flip the global market from supply shortfall to surplus.

That was the idea anyway. Katanga’s cobalt, however, has turned out to be radioactive. Glencore’s operating subsidiary, Katanga Mining, has found uranium with “low levels of radioactivity” in its cobalt hydroxide product.

Not enough to pose a health and safety scare, but enough to prevent the material being handled by ports. Katanga will keep producing but it has suspended cobalt sales until it has built an ion-exchange plant to remove the uranium.

The cobalt supply wave has been postponed until the second half of next year. That may be good news for investors who have watched prices slump from more than $90,000 a tonne in the second quarter to $55,000 today.

But it’s hardly reassuring for buyers, underlining the fragility of a supply chain that still overwhelmingly depends on the mines of the DRC. Katanga’s Kamoto mine produced 6,450 tonnes of cobalt in hydroxide in the first nine months of this year, seemingly on track to hit Glencore’s 2018 guidance of 11,000 tonnes before a further build to 34,000 tonnes next year.

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