By the end of 2025, Africa may witness the inauguration of its inaugural cobalt sulphate refinery, a significant development as it would be one of the rare facilities outside of China capable of producing this essential component for lithium-ion batteries.
Recently, the Nigeria-based Africa Finance Corp. indicated its intent to provide $100 million in financing to Kobaloni Energy, supported by mining expert Mick Davis’ Vision Blue, for the establishment of this refinery in Zambia. AFC’s CEO, Samaila Zubairu, mentioned in a February 9 interview that the investment decision should be reached within the next 3-4 months. Upon finalization of the financing, production could commence within 18 months, as outlined by Johnny Velloza, co-founder of Kobaloni, via text message.
This endeavor is poised to diversify a critical segment of the global battery manufacturing supply chain away from China, which currently monopolizes approximately 75% of cobalt refining capacity worldwide. While Zambia isn’t a significant cobalt producer, its neighboring Democratic Republic of Congo extracts about two-thirds of the globe’s cobalt supply.
Despite the promising prospects, cobalt prices have experienced a substantial decline from their previous highs exceeding $80,000 per ton two years ago to approximately $28,000 on the London Metal Exchange. This oversupply-induced price drop poses challenges for investments in the metal.
