In a significant shift in the cobalt market, a Chinese miner, Huayou Cobalt, has surpassed Glencore as the world's leading cobalt producer. Huayou Cobalt saw a remarkable 170% increase in cobalt output in 2023, producing 22,000 metric tons compared to Glencore's 20,000 metric tons. This change in leadership is attributed to Huayou Cobalt's investments in new projects and expanded production capacity [82080d3d].
The surge in cobalt production is driven by the growing demand for electric vehicles and renewable energy technologies, as cobalt is a crucial component in lithium-ion batteries. Glencore, a Swiss mining and trading company, has long held the dominant position in the cobalt market. However, Huayou Cobalt's rapid growth has disrupted this market dynamic and highlights China's dominance in the global cobalt supply chain.
Huayou Cobalt has further solidified its position in the industry by securing long-term supply agreements with major electric vehicle manufacturers. This success underscores the importance of cobalt in the transition to clean energy and China's strategic efforts to secure critical resources for its burgeoning electric vehicle industry.
Meanwhile, a growing group of Glencore investors are urging the company to continue mining coal instead of spinning out the unit. They believe coal will remain a lucrative option for at least a decade, even as renewable energy becomes more prominent. Glencore plans to list its coal assets separately in New York after completing a $6.9 billion deal to buy the majority of Canadian miner Teck's coal business. However, some investors argue that divesting coal assets can lead to a worse climate outcome if the assets are shifted into private markets with no investor oversight. Three top-15 investors have already expressed their opposition to the spin-off plan. They believe a responsible wind-down of coal is better than divestment and would facilitate a 'just transition' to a greener future. Glencore's carbon emissions rose 8.8% in 2023 due to higher coal production, but were still down 21.8% from a 2019 baseline. The company's efforts to address climate change have been mixed, according to the Climate Action 100+ investor group. Despite the environmental concerns, investors argue that the coal assets would continue to be profitable and benefit the rest of Glencore's portfolio, citing a likely surge in demand for cheap electricity from data centers in the future [7e5f5563].
In other news, Idaho is emerging as a significant hub for cobalt mining. The Jervois mine, known as the Idaho Cobalt Operation (ICO), was set to open in October 2022 but was closed before it had even opened due to falling cobalt prices. However, the demand for cobalt, which is essential for lithium-ion batteries used in phones and electric cars, has soared in recent years. The Biden Administration has identified a lack of cobalt mines as a threat to national security. Despite the low price of cobalt, the ICO mine is still operational due to contributions from companies, investors, and a $15 million check from the U.S. Department of Defense. Other mining companies are also interested in Idaho for gold, copper, and cobalt mining. The Bureau of Land Management oversees mining regulations in the U.S. Department of the Interior [474bf3e9].