High production: Workers at a cobalt mine in the Democratic Republic of Congo are seen in this file photo. Cobalt prices have plummeted by almost two-thirds over the past two years on rising supply with the country and Indonesia mining more of the metal. — AFP
MELBOURNE: Australian miner Jervois Global Ltd is cutting costs and jobs in response to a plunge in cobalt prices that it’s blaming on Chinese oversupply.
The cobalt and nickel producer has axed or made part-time 30% of its senior corporate management roles, while fees for non-executive directors have been cut by the same amount, it said in a exchange filing.
Some 5% of staff at its project in Finland have been let go, Jervois said.
Cobalt prices have plummeted by almost two-thirds over the past two years on rising supply – the Democratic Republic of Congo and Indonesia have been mining more of the metal – and a slowdown in demand growth.
Chinese plants processed 80% of global cobalt supply last year, according to specialist trading house Darton Commodities.
Jervois mothballed a project in Idaho, which would have been the first new US cobalt mine in decades, about a year ago, highlighting the challenge facing the Biden administration as it attempts to chip away at China’s dominance in the supply chains of metals vital to the energy transition.
The recent cost-cutting is due to “adverse cobalt market conditions caused by Chinese overproduction and its impact on pricing,” Jervois said.
It added that it remained “determined to deliver a responsibly sourced, Western supply chain of critical minerals.”
Jervois shares are down 87% over the past year, weighed down by a dilutive share issuance.
Analysts have said cobalt prices are unlikely to improve any time soon. — Bloomberg
