The Cobalt Market- Supply Constraints
Cobalt is predominantly mined and refined as a by-product of copper and nickel operations, meaning that future supply hinges on developments in these markets. As cobalt demand is forecast to grow at a greater rate than copper and nickel demand, an excess amount of primary metals will need to be mined and refined in order to meet the world’s growing cobalt needs. In other words, major cobalt producers cannot scale up production to match the expected demand.
An incredible 94% of global cobalt supplies come from nickel and copper miners that produce cobalt as a minor by-product. Only 6% of global cobalt supplies come from primary cobalt mines that may be able to increase production in response to growing demand from the battery industry. The balance, however, is sourced mostly from countries with elevated sovereign risk, and/or labour and environmental practices that are a focus of international scrutiny. For example, the conflict-stricken Democratic Republic of Congo, or DRC.
Consequently the cobalt supply chain is fragmented due to the dislocation between where cobalt is mined and where the refining intellectual property lies.
This greatly benefits Riva where subject to ongoing exploration success, Tabac will provide both a secure independent source of cobalt and leverage to future market price sensitivities. Riva is potentially uniquely positioned as a front runner with a project that has both the scale and grade to meet the anticipated ever growing global demand.