Resources are king. We have been deeply engaged for a long time in the Democratic Republic of Congo—the world’s primary cobalt-producing region—acquiring high-quality mines and establishing our own independent cobalt trading system. Currently, the company controls the Kambove tailings and the Nimura mine, both held by MIKAS Company (with a 72% stake), as well as the mining right PE527, collectively accounting for cobalt reserves exceeding 70,000 tons. Meanwhile, by setting up a wholly-owned subsidiary, CDM, locally, the company has built a cobalt procurement and trading system that offers significant cost advantages.

According to China Powder Network, resources are paramount. The company has long been deeply engaged in the Democratic Republic of Congo—the world’s leading cobalt-producing region—acquiring high-quality mines and establishing its own independent cobalt trading system. Currently, the company controls the KAMBOVE tailings and NIMURA mine owned by MIKAS Company (with a 72% stake), as well as mining right PE527, collectively holding cobalt reserves exceeding 70,000 tons. Meanwhile, the company has established a wholly-owned subsidiary, CDM, locally to build a cobalt procurement and trading system, which offers significant cost advantages.

1. Product prices are entering an upward trend, coupled with capacity release—both volume and price are rising, potentially leading to a significant improvement in performance.

(1) Resources are king. We have been deeply engaged for the long term in the Democratic Republic of Congo—the world’s leading cobalt-producing region—acquiring high-quality mines and establishing our own independent cobalt trading system. Currently, the company controls the Kambove tailings and the Nimura mine through its 72% stake in MIKAS Company, as well as the PE527 mining right, collectively holding cobalt reserves exceeding 70,000 tons. Meanwhile, by setting up a wholly-owned subsidiary, CDM, locally, the company has built a cobalt procurement and trading system that offers significant cost advantages.

(2) A dominant player in the cobalt smelting industry, with a cobalt product capacity reaching 20,000 tons (in terms of metal content). In 2015, the company held a 25% domestic market share and a 14% global market share. With the further expansion of production capacity following the technological upgrade of the Quzhou New Cobalt Materials Project, the company’s market position will be further significantly enhanced.

(3) Expand downstream by investing in the construction of a 20,000-ton precursor for ternary cathode materials for lithium-ion batteries, thus capitalizing on the booming new-energy vehicle market. Currently, about 6,000 tons have been completed and put into operation, and full completion and operation are expected by 2017.

2. Supply rigidity + strong demand + low inventory—The cobalt industry is entering a golden investment period over the next two years.

(1) The price is at the bottom of the cycle, with significant room for upward movement;

(2) Medium- and large-scale mines are frequently cutting production, and virtually no large-scale mines are expected to come online over the next two years, meaning supply’s downward pressure on prices will be relatively weak.

(3) Downstream demand is experiencing robust growth. According to estimates by the Ministry of Industry and Information Technology, during the 13th Five-Year Plan period, the annual average growth rate of cobalt—a strategic minor metal for new materials—is expected to reach 12.5%. In the traditional consumer electronics sector, particularly in smartphone batteries, the trend toward increasing battery capacity is firmly established. A minor technological shift in the industry—adopting “dual-cell + fast charging” solutions—could once again boost demand for cobalt used in consumer lithium-ion batteries. The ternary technology route for new-energy vehicles is poised to become mainstream, further driving cobalt demand with a “low base plus high growth” trajectory. Meanwhile, distributed energy storage is quietly gaining momentum, and ternary batteries are set to make further inroads.