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June 5, 2014

ENRC to halt production of cobalt oxide concentrates in 2015

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MetalBulletin.com - June 5, 2014 - London

ENRC to halt production of cobalt oxide concentrates in 2015

Kazakhstan-based miner ENRC will halt production of cobalt oxide concentrates at its DRC Boss Mining operation from the start of 2015, Metal Bulletin understands.

The company will not expand its DRC mine when oxide concentrate resources are depleted next year, owing to low market prices, according to sources familiar with the situation.

Low-grade cobalt metal prices, on which concentrate sales are typically based, have dropped from close to $20 per lb in 2010 to the low teens in 2014.

Cobalt prices have stabilised over the past few weeks at $13.25-14.10 on low-grade.

The news about ENRC will come as a blow to Chinese cobalt salt makers, who have been struggling to source raw material at a time of tough competition on end products.

Oxide concentrates are widely used in China, where they are leached and used to make cobalt salts.

Most Chinese cobalt salt makers source the majority of their feed from three DRC-based suppliers: ENRC, Freeport Cobalt and Glencore.

ENRC exports around 4,000 tpy of cobalt contained in oxide concentrates to China, sources estimate.

ENRC will continue to produce sulphide concentrates at Boss Mining.

These sulphide concentrates are used as feed for cobalt and copper metal at ENRC’s Chambishi operation in Zambia, Metal Bulletin understands.

Some cobalt hydroxide produced at the Tenke operation in the DRC used to be sold to Chambishi, Metal Bulletin understands. More of this hydroxide is now going to Kokkola in Finland, however, after its sale to Freeport Cobalt last year.

Chambishi cobalt is now solely reliant on sulphide feed from Boss Mining, Metal Bulletin understands.

Sulphide concentrates cannot be treated at most Chinese operations, owing to a lack of roasting facilities, Metal Bulletin understands.

ENRC had not responded to requests for comment at the time of writing.

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