By Ernest Scheyder and Pratima Desai
SALMON-CHALLIS NATIONAL FOREST, Idaho- The only US cobalt mine sits fallow in the northern Idaho woods, a mothballed hunk of steel and dirt that is too expensive for its owner to operate because Chinese rivals have flooded global markets with cheap supplies of the bluish metal used in electric vehicle batteries and electronics.
Jervois Global which dug the mine into the side of a nearly 8,000-foot (2,400-meter) mountain, watched helplessly last year as cobalt prices plunged after China’s CMOC Group Sopened the Kisanfu mine in the Democratic Republic of Congo, pushing global production of the metal to an all-time high. The Idaho site, which Jervois bought in 2019, was idled in June 2023 just weeks before it was set to open. More than 250 workers lost their jobs. A skeleton crew now rotates unused rock crushing equipment weekly to keep it from flattening under its own weight. “We were straightforward with our staff and told them:
‘This is all about the price of cobalt,’” site manager Matthew Lengerich told Reuters during a visit to the facility. Jervois says cobalt prices need to reach at least $20 per pound for the site to open. But prices sat near $12.17 in July. A similar quandary faces BHP Albemarle and other Western mining companies trying to compete with metals produced by Chinese-linked companies, some of which use coal-generated electricity, child labor or other practices not meeting the standards set by many governments and manufacturers. Western miners say their competitors have inherent cost advantages that enable rapid production expansions even as prices for cobalt, lithium and nickel have plunged more than a third in the past 18 months. Operational costs for many of these Western companies have, as a result, been exceeding what market prices will cover.
That has fueled growing calls from some policymakers and miners, including Jervois and Albemarle, for a two-tier pricing system with a premium for sustainably produced metals, according to interviews with more than three dozen traders, investors, executives, purchasing agents, and pricing agencies.
The plan is to charge more for a metal that is produced sustainably, whether that is through direct transactions or via multiple prices for a metal listed through futures exchanges, depending on production methods. For example, there would be one price for standard nickel and another for green nickel. “Western miners simply can’t compete with China, and China has shown the willingness to drive market prices way, way down,” said Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines. Two-tier pricing could radically shift how metals needed for energy transition have been bought and sold for centuries yet also reduce market transparency as miners could bypass metals exchanges to negotiate directly with customers. It could also, two analysts told Reuters, lead to multiple definitions of what exactly constitutes “green metal.”
