MMG Suspends Cobalt Operations at Kinsevere Mine Following Price Decline

MMG has suspended its cobalt processing operations at the Kinsevere mine in DRC due to a price slump and export ban. The firm invested $600 million in cobalt and copper production. The DRC’s oversupply of cobalt and recent state regulations have influenced market conditions. MMG plans to resume operations based on pricing evaluations and will increase copper production by 40%.

China’s state-owned mining enterprise, MMG, has suspended operations at its cobalt processing facility at the Kinsevere mine in the Democratic Republic of Congo (DRC) shortly following its launch. This decision stems from a significant decline in cobalt prices along with a recent export ban imposed by the Congolese Government, as reported by Bloomberg.

MMG decided to halt its Kinsevere operations in December 2024 due to unfavorable market conditions affecting cobalt, a crucial element in electric vehicle batteries. The company, majority-owned by China Minmetals, had invested approximately $600 million into boosting copper output and initiating cobalt production at this location.

Despite MMG’s investment, the cobalt facility entered a care and maintenance phase just after its commissioning commenced in September 2023. The DRC is a prominent cobalt producer, currently experiencing surging production, especially by China’s CMOC Group, which has contributed to an oversupply and resultant price decline.

To manage and control cobalt pricing more effectively, the Congolese Government imposed a four-month export ban recently. Regarding operations, an MMG spokesperson noted the company’s adoption of a “flexible production strategy,” indicating that cobalt operations will be resumed contingent upon favorable price conditions, while the firm also aims to elevate copper output by at least 40% this year.

Last year, MMG produced 1,600 tonnes of cobalt from its Kinsevere operations and 380,000 tonnes of copper across its global operations, including Africa, Australia, and South America. The Las Bambas mine in Peru stands as MMG’s most significant asset. Additionally, the DRC has established a state monopoly to oversee the production and export of artisanal cobalt, granting the state-owned Entreprise Generale du Cobalt exclusive rights to export hand-dug cobalt.

In summary, MMG has halted cobalt operations at its Kinsevere mine due to declining prices and an export ban, despite considerable investment. The DRC’s increased cobalt production and new regulations aimed at controlling pricing have significantly impacted the market. Going forward, MMG plans to adapt its strategy based on price evaluations while focusing on increasing copper production significantly.

Original Source: www.mining-technology.com