The pressure on junior miners trying to secure essential materials is growing, and now looks like it is set to surge.
In response to this month’s fire at the Grasberg mine in Indonesia, the company Sibali is looking to secure supplies of cobalt in order to minimise disruptions of its production.
In mid-August, Freeport-McMoRan had said that it would need to ‘take further steps’ to counter supply disruptions if industry prices for copper and cobalt remained elevated.
The surge in demand for cobalt, the vital ingredient in rechargeable batteries that are used in portable electronic devices, led to surpluses of the cathode material. Supplies are currently set to remain tight.
After this week’s news, it appears even a fire at an Indonesian mine has not been enough to meet the world’s needs, with Sibali’s plans being confirmed on Monday.
“We want to transfer from the local mines to external smelters, based on the copper price where it is at,” Sibali’s chief executive Surya Sriyadi said at a press conference.
No official price has been determined as yet. Last week, Dow Jones reported that the price of cobalt in China had shot up on fears of a slowdown in Chinese demand.
‘Red Tide’ of suspended operations across Africa
Elsewhere, concerns that a ‘red tide’ of suspended operations across the continent may spread, according to an industry report.
Oil and gas supplier Total has confirmed that operations at its two operating wells in Gabon, South Africa, Ghana and Senegal were put on hold following a recent build-up of gas in its central processing facility.
The shutdown of the wells follows a shutdown of the ocean-borne Bonga South-West FPSO, Total’s offshore platform, which needs some 3m of dry cargoes to keep pumping gas.
The UK’s biggest offshore oil and gas producer, Total is set to lose more than USD 2bn due to the stoppage of the Coker #1 and Coker #2 cokers at its Bonga South-West FPSO, causing production at the platform to slump from 140,000 barrels per day (bpd) to 61,000 bpd.
Chevron, one of the world’s largest oil and gas producers, halted all production in Nigeria in June this year as a result of prolonged shutdowns in the country. However, the oil major says it is trying to find a solution to mitigate its production losses and the effect on customers.
Upstream’s sister publication IHS Markit’s latest exploration report identifies Ghana as one of the areas most likely to see output rise in the medium term.
The report says that Ghana aims to have already assessed six major oil and gas prospects, of which one is already producing, as it looks to rekindle production following Hurricane Isaac and then its shut-in caused by ExxonMobil’s strike action in August.