Shalina Resources Ltd and its Democratic Republic of Congo (DRC) subsidiary Chemaf Sarl, a company specializing in cobalt and copper exploration, mining and processing in the DRC, have yesterday announced the signing of a marketing agreement until December 2020 for cobalt hydroxide with Trafigura Group, a leading commodities trading firm.
The marketing agreement covers cobalt production from existing producing assets operated by Chemaf and covers the period until December 2020. In 2017, Chemaf produced over 5,000 tonnes of cobalt – an essential constituent of electric batteries – largely from its state of the art Etoile mine and processing plant in Lubumbashi. Production is set to rise to 7,000 tonnes in 2018.
“We are one of the largest and most ambitious cobalt producers in the DRC – Trafigura is helping us fuel our ambition”, said Shiraz Virji, Chairman of Chemaf. “This offtake agreement will enable us to work together to transform DRC’s precious cobalt resources into jobs and fiscal revenues for the country, as well as to meet rapidly increasing international demand.” Sebastien Ansel, Executive Director and Chief Financial Officer of Shalina Resources, added: “With demand for electric vehicles set to rise exponentially in the coming years, Chemaf is playing an increasingly important role in providing the market with high-grade cobalt hydroxide.
The agreement announced yesterday will enable Chemaf to accelerate production whilst also investing in our highly attractive exploration portfolio.” With one of the largest and most promising exploration portfolios in the region, Chemaf is investing in its people and its operating capacity to meet the needs of the future. Part of Chemaf’s portfolio includes the giant Mutoshi concession in Kolwezi, a property containing approximately 300,000 tonnes of cobalt resource.
Chemaf is currently developing a leach SXEW processing plant at the site, due for completion in 2019, with capacity to produce 20,000 tonnes of copper and 16,000 tonnes of cobalt hydroxide per annum. An important component of the marketing deal involves Trafigura providing direct and ongoing support to Chemaf in bolstering the company’s ability to manage social and environmental impacts in line with international standards such as the OECD’s ‘Due Diligence Guidance for Responsible Supply Chains’ and Trafigura’s own responsible sourcing programme.