The move gives CATL a sizable stake in some of the world’s most important cobalt assets.

CATL will take a 24.68% indirect stake in CMOC via a capital boost and stake transfer, according to a company filing on the Shenzhen Stock Exchange.  As a result, CATL would become CMOC’s second-largest shareholder after Shanghai-based private equity firm Cathay Fortune Corp, which holds 30.19%.  CATL has suggested that it has no plans to control CMOC or increase its stake over the next three years.

CMOC is a major cobalt player through its ownership of the Tenke Fungurume Mining (TFM) copper-cobalt operation in the DRC – one of the three largest cobalt mines (and cobalt hydroxide producers) in the world.  In August 2021, the company announced its plans to invest US$2.5Bn to expand TFM by building three ore production lines, expected to boost the average output of copper by 200ktpy and cobalt by 17ktpy. 

Notably, TFM is currently facing some difficulties after a temporary administrator appointed by a DRC court ordered CMOC to suspend the marketing and export of its TFM production earlier this year following accusations of CMOC of understating reserve levels and reducing royalties due to Gécamines.  CMOC denies this.  While export is suspended, mining and hydroxide production continue, and stocks are being built up. 

CMOC also owns 71.25% of the Kisanfu copper-cobalt project in the DRC, in which CATL has a 23.75% stake and Gécamines holds 5%.  In July, CMOC announced an intention to invest US$1.826Bn to develop Kisanfu which is expected to start production in 2023 and produce copper-cobalt concentrate, cobalt hydroxide, and copper cathode at a production rate of 90ktpy copper and 30ktpy cobalt. 

Project Blue considers these projects highly important if feedstock supply is to meet demand later in the decade and through its investments, CATL has moved to secure access to cobalt for its downstream production. CATL had an annual battery production capacity of 170GWh last year with 140GWh of capacity under construction. The company aims to install a total of 670GWh annual capacity by 2025.  Reports suggest that, despite geopolitical tensions, the company also intends to develop battery production capacity in North America by 2026.