More on DRC cobalt and KNI's European Cobalt Project

Our Zero Carbon copper, nickel and cobalt investment Kuniko (ASX:KNI) has had a solid two weeks on the market, rising more than 150% since it announced that it had been granted a drilling permit at its Norwegian cobalt project. The current geopolitical environment and cobalt supply concerns no doubt helped too.

In our recent note on our investment KNI, we highlighted a rapidly growing need to diversify the cobalt supply chain amid increased geopolitical tensions.

KNI’s Skuterud cobalt project lies in politically stable and mining friendly jurisdiction — an area that was formerly the largest cobalt producing region of the world.

Currently, some ~70% of it is sourced from the Democratic Republic of Congo which produced 120,000 tonnes in 2021.

Recent media attention has centred on the various challenges the DRC faces in ethically mining the battery metal and their complex relationship with Chinese mine operators.

This New York Times article is of particular interest to us:

The article notes that, “Biden administration officials have been looking for ways to strengthen ties with Congo and gain access to critical resources like cobalt. A delegation of White House officials flew to Kinshasa, the capital, earlier this year for meetings with Mr. Tshisekedi and other top officials. The U.S. government is backing the review of mining contracts in Congo as part of an effort to crack down on corruption.”

For us, this underscores how battery metals are taking on an increasingly geopolitical flavour.

Tshisekedi is the president of the DRC and his government has previously pitched a ban on the export of raw cobalt from the country and argued for localising the processing of the battery metal.

According to Reuters, a new local mine administrator is in place at the Tenke Fungurume mine which in 2020, produced 182,600 tonnes of copper and 15,400 tonnes of cobalt. That’s around 10% of total global cobalt production in 2021.

With European EVs needing cobalt more than ever before, we’re eagerly looking forward to KNI’s maiden drilling campaign in Norway, slated to begin in the first week of May.

Here is why we invested in KNI and what we expect it to achieve in 2022 - KNI Investment Memo.