Roskill forecasts cobalt demand to expand at a compound annual growth
rate of 7% in the period to 2030, underpinned by the uptake of electric
vehicles globally and healthy medium-term demand from portable
electronics amid the roll-out of 5G technology. The trend to reduce
cobalt’s use in EV batteries will continue, but be offset by the growing
To keep the market in balance, Roskill believes new supply equivalent
to four ‘Mutandas’ will be required over the period to 2030. “While in
the short to medium term, the timing of Mutanda’s restart would be a
determining factor for market balances, longer term, we believe cobalt
price needs to stay at a reasonable level to incentivise new
investment,” Lu said during the presentation.
Lower cobalt AISC
The latest reading of Roskill’s cobalt cost model service (extractive)
shows all-in sustaining cost (AISC) for producing the critical battery
metal at stable levels through 2020 and 2021, at about $22,400 per tonne
($10.15/lb.), with the 2022 outlook calling for a drop.
Cobalt production is usually a by-product of copper and nickel, and
positive price movements in these commodities mean producers are
pocketing huge margins.
Given a 30% year to date rise in the copper price, the nickel price
is chugging along nicely following the March correction, and the cobalt
price averaging more than $44,000 per tonne ($19 per lb.) in the year up
to mid-May, all active cobalt production capacity is cash positive on
an AISC basis, says Roskill.
Mining costs are expected to fall through 2022 on lower stripping
ratios and operating efficiencies implemented at major cobalt-producing
mines such as Kamoto, Tenke Fungurume and Moa.
Roskill also flagged rising processing costs as offsetting much of the drop, mainly owing to falling overall mined grades.
In the medium to long term, Roskill expects that the cobalt cost
curve will trend upwards and become left-skewed as higher metal prices
incentivise higher-cost production to come online.