the cobalt series, part five: what zambia should build
a zambian cobalt value addition strategy has three tiers. each tier adds more value than the previous one. each tier requires more investment and more technical capability. each tier represents a more complete capture of what the cobalt in zambia's ground is ultimately worth.
tier one is what zambia already does. the chambishi metals operation produces cobalt metal and cobalt compounds including cobalt sulphate and cobalt hydroxide. processed cobalt. a significant hydrometallurgical chain already operating. zambia is not starting from zero. but tier one is not where the value is.
tier two is NMC precursor manufacturing. the conversion of cobalt sulphate — which zambia produces at chambishi metals — into the nickel-manganese-cobalt mixed hydroxide precursor that battery cathode manufacturers use. this is the processing step that currently happens overwhelmingly in china. the capital cost of a tier two NMC precursor plant at meaningful scale — 10,000 to 20,000 tonnes of precursor per year — is in the range of USD 200 to 400 million. within the range of what development finance institutions — the IFC, the AfDB, the US development finance corporation, the EU global gateway — could finance in a zambia whose governance credentials, existing processing infrastructure, and ethical cobalt positioning make it a compelling investment case.
the market for tier two product is immediate and growing. the battery manufacturers of south korea — LG energy solution, samsung SDI, SK on — and japan — panasonic, sumitomo — and increasingly american manufacturers building domestic battery supply chains under the inflation reduction act, are all actively seeking to diversify NMC precursor supply away from chinese dominance. a zambian NMC precursor plant producing to international quality specifications, with fully documented ethical supply chain credentials, would have customers before it was commissioned.
tier three is cathode active material manufacturing. the conversion of NMC precursor into finished cathode active material — the NMC oxide powder that goes directly into battery cell manufacturing. higher temperature. more exacting quality control. higher capital cost. higher margin. a longer-term ambition that requires tier two to be successfully established and a zambian technical workforce trained in precursor production.
the DRC-zambia bilateral agreement on producing battery precursors is the beginning of the institutional architecture that a tier three ambition would require.
the cobalt in zambia's ground has travelled from the ore body to the slag to the chambishi metals plant to the international cobalt market. each step has added value. each step has happened in zambia.
the next steps — NMC precursor, cathode active material, and eventually the battery cell itself — will determine whether the cobalt revolution builds zambia or builds somewhere else.
the cobalt series continues. 🔵