Cobalt, no “metal war”!

Publication le 17 avril 2018 sur Les Echos Le Cercle

 

The war against the “metal war” is becoming more international.

The London Metal Exchange statement today in Paris at the 12th Forum on Responsible Mineral Supply Chains organised by the OECD suggests that the debate on cobalt as a “blood mineral” will soon be anachronistic, a vision from the past.

When we look at the speed at which the LME was reacting to the new situation of the Russian manufacturer Rusal’s stamped aluminium, what should we think of its future reaction speed when, in the same week, it indicates that it will commit itself to ensuring that all metals traded on its market follow the OECD’s recommendations?

Gradually, this institution, which succeeds in imposing its “responsible minerals” recommendations for gold, tungsten, tantalum and tin in the Great Lakes region, is seeing its approach extended to the whole planet, particularly cobalt.

Consumers, such as Apple, have a strong adherence to OECD recommendations; and on the production side, especially in the DRC, 90% of the metal is compliant because it originates in the mining industry. Mining craftsmanship represents only about 10% of production and is indeed a concern that is rooted in poverty. It is therefore normal that the market that pivots between demand and supply of metals, the LME, should benefit from OECD contagion, i.e. that metals traded on the LME should exclude those whose production is illegal from the lists of approved producers. To affirm the opposite only contributes to fuelling the balkanization of central Africa with risks that are still unknown.

If the LME is fast enough, stigmatizing cobalt production will become a debate of the past as well as a “strategic metals war”.  Indeed, the warrior palimpsests on this subject are already anachronistic when we observe the recent Japanese underwater discoveries in rare earths.

In the future, if metals remain in tension, it will probably not be small metals – small metals, small problems – but larger ones – to large metals, large problems. It is in this context that it is preferable to devote your time to studying the major balances of the copper, aluminum, nickel, zinc, concrete, cobalt, aggregates and steel markets!

Didier JULIENNE

Linkedin: Didier Julienne

Twitter:  @didierjulienne

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