(Reuters) - Shares in Glencore-owned Katanga Mining Ltd, surged for the second straight day on Tuesday on news it has restarted a copper and cobalt mining operation that will become one of the world’s biggest producers of cobalt, a critical ingredient for electric vehicle batteries.
Toronto-listed Katanga said on Monday it had successfully commissioned a part of its processing facility at its Kamoto Copper Company in Democratic Republic of Congo, which was idled two years ago.
Katanga said it expects to produce 11,000 tonnes of cobalt at the facility next year, rising to 34,000 tonnes in 2019. Global cobalt supply is forecast at around 110,000 tonnes in 2019, according to a Dec. 4 BMO research report.
Cobalt is almost exclusively produced as a by-product of copper and nickel mines. Cobalt prices have more than doubled this year on expectations for multi-year deficits over the next decade due to constrained supply and rising demand from the electric vehicle industry.
Katanga’s shares surged as much as 49 percent on Tuesday to C$2 before being briefly halted by the Investment Industry Regulatory Organization of Canada, or IIROC, which can temporarily suspend trading in stocks with rapid, significant and unexplained price movements. Katanga was last up 25 percent.
The stock surge is a turnaround from three weeks ago when Katanga’s shares fell sharply after three Glencore executives stepped down from its board after an internal review identified weaknesses in its financial reporting controls.
Glencore owns 86 percent of Katanga.
Reporting by Nicole Mordant in VancouverEditing by Marguerita Choy