Eurasian Resources Group’s (ERG) CEO, Benedikt Sobotka said the company plans to increase cobalt output at its Democratic Republic of Congo (DRC) facility to meet the demands of the electric car industry, which it expects to boost demand for the metal.
In an interview in Moscow, Sobotka said ERG, a global mining and metals group, aims to raise cobalt output fivefold to 20,000 tonnes in 2019. This move will help the company claim a large portion of the booming market whose volume was around 100,000 tonnes in 2017. The growth is expected to come from the launch of the Metalkol facility in Congo, where ERG will reprocess cobalt and copper tailings (waste dumped by other miners).
ERG believes Metalkol will become one of the world’s biggest cobalt producers with output capacity of 24,000 tonnes of cobalt and 120,000 tonnes of copper cathode. Despite the government of Congo’s decision to enact a new mining code, which seeks to impose a windfall of profit tax, Sobotka said ERG remained committed to its operations in Congo.
According to Sobotka, ERG posted a core profit of more than $2 billion in 2017 and expects to boost the number in 2018 with the help of its operations in Congo. He said “if you want to be a cobalt market player, DRC is the place to be, it has 70 percent global (cobalt) reserves”.
Congo produces more than half of the world’s supply of cobalt, which is a key ingredient in the lithium-ion batteries essential for electric energy storage. ERG has two other copper and cobalt mining units in Congo and owns a smelter in Zambia which refines both metals. The company is projected to produce 4,000 tonnes of cobalt and 150,000 tonnes of copper in 2018.
Sobotka noted that in 2019, output is set to grow to 20,000 tonnes of cobalt and 230,000 tonnes of copper. He said ERG plans to increase its output in response to the growth in the electric car industry that will reshape demand for cobalt.
The company’s CEO said ERG’s long-term goal “is to boost cobalt capacity to 50,000 tonnes and copper to over 350,000 tonnes”. ERG’s cobalt output will mostly come in hydroxide form, which is used to produce batteries for electric cars and electronic devices.