US Firm Building Cobalt Refinery Signs Congo Supply Agreement

Article content

(Bloomberg) — A company aspiring to build the US’s first large-scale cobalt processing facility announced an agreement that could allow it to source hand-dug metal from the Democratic Republic of Congo.

Article content

EVelution Energy LLC is part of a memorandum of understanding signed in Madrid on Wednesday which also involves state-owned Entreprise Generale du Cobalt, or EGC, and commodity trading giant Trafigura Group. The arrangement establishes “a framework for the long-term supply of Congolese cobalt hydroxide” to the US, the trio said in a joint statement.

Article content

Article content

Article content

The deal comes five months after the US and Congo concluded a partnership granting US investors preferential access to some of the central African nation’s abundant reserves of metals, including copper, cobalt, lithium and tantalum. Congo has assumed a central role in the Trump administration’s efforts to reduce US dependence on China for a range of mineral products.

Article content

Article content

Congo is the world’s dominant supplier of cobalt, accounting for about three-quarters of global output before the introduction of strict export restrictions last year. EGC holds a monopoly over buying and selling artisanal production of the metal that’s used in electric-vehicle batteries as well as the defense and aerospace industries.

Article content

EVelution plans to complete a plant in Arizona by 2029 that’s capable of manufacturing both cobalt metal and a battery-grade sulfate product. The firm aspires to meet about 40% of the US’s project demand for refined cobalt.

Article content

The project is “a critical step toward securing a reliable, long-term supply of responsibly sourced cobalt for domestic processing in the United States,” EVelution President Navaid Alam said in the statement. Trafigura will provide logistical and marketing services, it also said.

Article content

Article content

EVelution announced a deal last month through which it will supply the “substantial majority” of its future cobalt metal output to Japanese trading firm Mitsui & Co. for five years.

Article content

Most of Congo’s cobalt is extracted by major companies — including CMOC Group Ltd., Glencore Plc and Eurasian Resources Group — as a byproduct of copper mining. Although EGC only began operations late last year, the state firm looks set to become an important supplier after the government imposed export quotas in October.

Article content

EGC’s allowance of 5,640 tons for each of 2026 and 2027 is equivalent to about 6% of the total volume permitted to leave the country. The company has announced two provisional partnerships this year – with ERG and Mercuria Energy Group – focused on developing formal sites where artisanal miners can produce traceable cobalt.

Article content

Under the MOU, the parties intend to explore opportunities for EGC to take a minority equity stake in EVelution or its refining infrastructure. They’re also seeking to develop higher-value local processing capacity in Congo, according to the statement.

Article content

EVelution, EGC and Trafigura have “agreed to advance discussions toward definitive long-term commercial agreements over the coming months.”

Article content