Nanjing Hanrui Cobalt Co. Ltd., which produced one-third of China's cobalt powder in 2017, is looking to acquire cobalt projects to improve its self-sufficiency in raw materials in the face of increasing cobalt prices, Chairman Liang Jiankun said.
Liang's comments were made on a March 5 webcast in response to investor questions about the company's ability to secure stable supply after it posted a 575% surge in net profit for 2017.
Liang said he is confident in the stability of Hanrui Cobalt's supply channels in the Democratic Republic of the Congo, as it cooperated with owners of mines on leasing the mining rights or equipment. "We are also actively searching for high-quality mines to secure long-term, stable supply," he said.
President Liang Jie added that the company will look at the due diligence results, the potential of the project and reserve figures when considering whether to acquire mining or exploration rights.
The company only owns one mining license, acquired in 2009, but no exploration or mining plans are underway on the license, Vice President Fang Ligang said.
"It is a long-term goal for us to mine on our own mines and to be more involved in the mining process," Liang Jiankun said, without disclosing a timetable for acquisitions.
Investor concerns over the security of Hanrui Cobalt's supply of the raw commodity are coming at a time when the Chinese cobalt major is looking to significantly increase its production capacity in cobalt products.
The company's current annual production capacity of cobalt powder is at 15 million tonnes. It expects to commence a new production line with annual capacity of 30 million tonnes in China's Anhui province by the end of this year, board secretary Tao Kai said.
The company is also investing in an electrolytic cobalt plant with a 50-million-tonne capacity in the Congo, which is expected to start production in the first half of 2019, whereas its current capacity of cobalt hydroxide is at 50 million tonnes, Tao said.
"Currently, we can supply around 50 million tonnes to 70 million tonnes of cobalt concentrates and cobalt hydroxide for internal and external uses," Tao said.