A wave of civil unrest in South Africa, a key transit country for exports of cobalt feedstock from the Democratic Republic of Congo (DRC), has yet to affect shipments from the country, according to market participants in China.
The unrest began last week with protests against former president Jacob Zuma's jailing in the country's KwaZulu-Natal province, but have escalated and broadened to many parts of South Africa, including Gauteng, the most populous province and the largest city Johannesburg.
KwaZulu-Natal's Durban port is the main transit port for supplies of cobalt feedstocks, including hydroxide, carbonate and concentrate, from Africa to major consuming countries such as China and Finland.
Shops have been also ransacked and businesses set on fire in Durban. But a cobalt feedstock producer, which operates large-scale copper and cobalt mines in the DRC, told Argus that its warehouse and the port were a long way from where the riots are taking place.
"There is little impact on transportation for the time being," said the producer." It will depend on how long the turbulence will persist and whether they will spread to the transportation corridor. Things will become clearer in the coming one or two weeks."
A cobalt mining firm, which produces crude cobalt salts in the DRC, confirmed today that cobalt feedstock supplies are being transported normally. "We will keep an eye on the situation to see if there will be any impact on ports and roads in the coming days,"
The DRC is the world's largest producer of cobalt feedstocks, contributing more than 70pc of the global supply of 135,000 t/yr metal equivalent. More than 90pc of China's cobalt feedstock imports, which total 86,000 t/yr metal equivalent, come from the DRC.
China's combined imports of cobalt raw materials, including concentrates and intermediate products, mainly hydroxide, fell to 6,188t of metal equivalent in May, down by 33.5pc from April, following a significant rise in shipments in April after delays in the first quarter of this year. Shipments for a number of long-term contracts were delayed in the first quarter of this year because of reduced logistics efficiency at Durban because of the Covid-19 pandemic.
Prices for cobalt hydroxide were last assessed by Argus higher to $20-20.50/lb cif China on 6 July, up from $19.30-19.80/lb on 29 June, with tighter supplies in China. Spot availability was limited in China, as most of the volumes entering the country were tied up in long-term supply agreements.
