Glencore to double cobalt production in preparation for major role in EV revolution

Glencore (LSE:GLEN) is looking to consolidate its position in the burgeoning electric vehicle (EV) market by doubling its cobalt production over the next two years.

Cobalt is one of several elements (including lithium and zinc) which are crucial components in batteries that power EVs and smartphones, with prices for cobalt more than doubling in the last year as the EV revolution revs up.

Glencore’s Toronto-listed subsidiary Katanga Mining will increase its cobalt production in Democratic Republic of Congo to 34,000 tonnes by 2019, up from the current 20,000 tonnes a year guidance laid out by Glencore’s CEO Ivan Glasenberg in August.

The Swiss-based commodities giant has held discussions with Volkswagen, Tesla, Apple and other battery makers about signing supply contracts. “There’s a lot of customers who want to lock in supply,” said Glasberg.

Another of the company’s DRC subsidiaries, Mutanda Mining, was the largest producer of cobalt last year shipping 24,500 tonnes from a worldwide market of about 109,500 tonnes.

DRC is home to 60% of the world’s cobalt supply, and aims to take a larger share of earnings from the energy metal after lawmakers recently approved legislation to increase royalties to 3.5% from 2% and introduce a profit windfall tax.