Cobalt prices have surged following Eurasian Resources Group’s (ERG) force majeure on deliveries from its Metalkol operation in the Democratic Republic of Congo (DRC).
The move came in response to the DRC’s decision to halt cobalt exports for four months as it looks to curb oversupply.
China’s Wuxi Stainless Steel Exchange paused cobalt trading after prices soared nearly 12 per cent to 240 yuan ($52.6) per kilogram, the highest level since October.
In Europe, cobalt prices climbed to $12.25 ($19.51) per pound on March 7, up from $9.95 on February 24, according to pricing agency Fastmarkets.
The price jump has boosted ASX stocks, including Cobalt Blue, which has seen a 18.37 per cent boost in the past five days to reach $0.058 at market close on Monday March 10.
ERG is the third-largest cobalt producer in the DRC, with its Metalkol project accounting for approximately 7 per cent of global cobalt production in 2023.
The company’s force majeure declaration highlights the fragility of the cobalt supply chain, whereby the DRC controls 70 per cent of the world’s cobalt supply.
The DRC Government will review the export suspension in three months and may introduce export quotas, potentially signalling further disruptions.
Australia could capitalise on this opportunity, with Cobalt Blue accompanied by Sunrise Energy Metals as another cobalt aspirant.
The Sunrise battery material project is considered one of the largest nickel-cobalt-scandium deposits in the world, with the Sunrise refinery designed to produce enough nickel to support the production of up to approximately one million electric vehicles (EV) per annum, with cobalt production sufficient to support up to two million EVs per annum.
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