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The DRC accounts for about 70% of global cobalt output. Given the critical role of cobalt in the production of EV batteries and the increasing demand for these vehicles, this question aims to capture whether the DRC can expand its mining operations to meet the growing global demand for cobalt. Resolution will be provided according to reporting by the International Energy Agency.
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Based on the latest forecasts and market analysis, it is expected that the Democratic Republic of Congo (DRC) will significantly increase its cobalt output in 2024. According to Reuters, the country is anticipated to account for 180,000 tonnes of cobalt supply in 2023, marking an increase of more than 30% from 2022. Furthermore, this output is expected to rise to around 225,000 tonnes in 2024. This surge in cobalt production aligns with the global trend towards electric vehicle (EV) proliferation and the corresponding demand for cobalt, a critical component in the manufacturing of rechargeable batteries.
However, it's important to note that despite the increase in cobalt production, the market dynamics indicate a shift towards a supply surplus, impacting prices and potentially the strategic considerations for cobalt producers. A report from S&P Global suggests that the cobalt market is expected to move into a deficit by 2024, highlighting the complex interplay between supply, demand, and market prices in the coming years. The analysis suggests that while there is an anticipated growth in demand led by global passenger electric vehicle (PEV) sales, the increasing cobalt supply from the DRC and other sources may significantly influence market balances and pricing strategies.
Moreover, the global cobalt supply scenario is evolving with efforts to increase production in response to demand for batteries used in electric vehicles. The DRC, as the world's leading cobalt producer, plays a crucial role in this landscape. Projections indicate that while there was concern about a potential supply deficit, the expansion of production capacities in the DRC is helping to mitigate such risks, suggesting a more balanced market in the near future.
Given these insights, the DRC's role as a pivotal cobalt supplier is expected to strengthen further in 2024, underpinning the global supply chain for battery materials amidst the accelerating transition towards electrification and renewable energy sources.