Tengyuan Cobalt plans to invest ~US$1.77M to build a nickel and cobalt metal refinery in Ganxian District, Ganzhou Province, China.

The refinery will have a nameplate capacity of 30ktpy Ni and 3ktpy Co, including the by-production of sodium hypochlorite (24.3ktpy). Construction is expected to be completed within 18 months, with commercial production planned to start in Q4 2025. Additionally, the company is progressing its phase four expansion project at the Kolwezi Cu-Co SX/EW plant in Lualaba, in the DRC. Once operational this will increase Tengyuan’s DRC production capacity to 10ktpy Co, 60ktpy Cu, 200ktpy sulphuric acid and 16.5ktpy liquid sulphur dioxide.

In 2023, the company produced 15,595t Co and 46,646t Cu, representing a y-o-y increase of 60.7% and 77.96%. This was due to more production lines in China being put into operation, including production for nickel (10.5ktpy), lithium carbonate (2ktpy), and recycling of battery scrap (15ktpy).

Despite the company’s intentions to use nickel sulphate and cobalt chloride as raw materials to produce refined metals in its refineries,  an oversupplied cobalt market is expected to persist for at least the remainder of the year, adding more downward pressure on prices. This will be driven by weak downstream demand, capacity expansions, and production line conversions, as some Chinese producers are focused on producing more cobalt metal for an increased metal premium.