China's Youshan to Build First Overseas LFP Plant in Indonesia

Youshan New Material Technology

Chinese lithium iron phosphate (LFP) producer Zhejiang Youshan New Material Technology has announced plans to build its first overseas LFP production plant in the Indonesia Pomalaa Industry Park (IPIP). The plant will have a nameplate capacity of 50,000 t/yr, with construction expected to take 16 months. Production is slated to begin in the first half of 2026, marking a significant milestone in Youshan’s global expansion strategy.

Founded in 2018, Youshan specializes in the research and development of LFP materials and operates under the ownership of Huayou Holdings Group. Huayou Holdings is also the largest shareholder of Huayou Cobalt, a major player in the production of battery metals and cathode active materials.

Huayou Cobalt's Growing Presence in Indonesia

Youshan's announcement follows Huayou Cobalt’s aggressive investments in Indonesia’s battery materials sector. The company has commissioned production facilities for mixed hydroxide precipitate (MHP), nickel matte, and lithium nickel-cobalt-manganese (NCM) precursors. In October, Huayou launched its first overseas high-nickel ternary battery precursor plant in Indonesia, highlighting the country’s critical role in global battery materials supply chains.

Other Chinese producers, such as Jiangsu Lopal Tech, have also established LFP production in Indonesia. Lopal Tech began operations at its Indonesia-based plant earlier this year, signaling a broader trend of Chinese firms leveraging Indonesia’s natural resource wealth and favorable industrial policies to expand their global footprints.

LFP Demand and Price Outlook

The global market for LFP materials is surging, driven by strong demand from the energy storage battery sector and the growing adoption of lithium-ion batteries. Exporters are also ramping up shipments to overseas markets in anticipation of higher US tariffs on battery imports starting in 2025. As demand rises, major producers are expected to increase LFP prices in the near term.

Merdeka Battery Materials Reports Mixed Nickel Output in Q3 Amid Expansions

Merdeka Battery Materials

Indonesian nickel producer Merdeka Battery Materials (MBMA) reported a mixed production performance for the third quarter of 2023. While the company’s nickel ore output doubled due to favorable weather and increased mining capacity, nickel intermediates production experienced a decline.

Nickel Ore Output Surges, Intermediates Decline

During Q3, MBMA produced 4.74 million wet metric tonnes (wmt) of ore from its Sulawesi Cahaya Mineral (SCM) mine. Limonite and saprolite output reached 3.70 million wmt and 1.04 million wmt, respectively, more than doubling compared to the previous quarter. This growth was attributed to better weather conditions and expanded mining equipment deployment.

In contrast, nickel intermediates saw declines. Nickel pig iron (NPI) and low-grade nickel matte (LGNM) production from MBMA’s rotary kiln electric furnaces (RKEF) smelters fell 6.1% quarter-on-quarter to 20,557 tonnes. High-grade nickel matte (HGNM) output dropped by 3.2% to 12,979 tonnes of nickel.

Despite these quarterly dips, the company maintained its 2024 production guidance at 50,000-55,000 tonnes of HGNM and 80,000-85,000 tonnes of NPI.

Strategic Investments and Growth Plans

MBMA's long-term strategy focuses on bolstering output through strategic investments and partnerships. The SCM mine supplies saprolite ore to MBMA’s RKEF smelters and limonite ore to Huayue Nickel Cobalt’s HPAL plants. A second feed preparation plant (FPP), slated for commissioning by mid-2025, is expected to increase limonite ore processing capacity to over 9 million wmt annually.

The company collaborates with leading battery manufacturers to support its limonite production, targeting over 300,000 tonnes per year of nickel in mixed hydroxide precipitate (MHP). Key partnerships include:

• Green Eco-Manufacture (GEM): Joint development of PT ESG and PT Meiming HPAL plants with capacities of 30,000 t/yr and 25,000 t/yr of nickel in MHP, respectively.
• Brunp: Partnership with the subsidiary of Contemporary Amperex Technology (CATL) to establish a 60,000 t/yr HPAL plant for nickel in MHP.

Outlook for 2024 and Beyond

The company’s production guidance for 2024 remains robust, with saprolite ore projected at 4–5 million wmt and limonite ore at 9.5–10.5 million wmt. With the new FPP in operation by 2025, MBMA aims to significantly scale up production and maintain its competitive edge in the rapidly growing battery materials market.

As global demand for nickel intensifies, MBMA's strategic expansions and partnerships position it as a key player in the supply chain for electric vehicle batteries and renewable technologies.

EVelution Mitsui Cobalt Offtake Agreement Anchors Arizona Processing Project

EVolution, Mitsui

EVelution Mitsui cobalt offtake agreement gives the nascent US cobalt processor a major commercial anchor for its planned Arizona facility. EVelution Energy has signed a binding deal to supply Japanese trading firm Mitsui with the substantial majority of future cobalt metal output from the project.

The EVelution Mitsui cobalt offtake agreement covers up to 3,000 t/yr of cobalt over five years. The contract is valued at about $850mn based on current market prices, according to the company.

The EVelution Mitsui cobalt offtake agreement is strategically important because the US is trying to build more domestic processing capacity for battery and defence-related materials. Cobalt remains essential for electric vehicle batteries, superalloys, industrial chemicals and high-performance manufacturing.

The planned facility in Yuma County, Arizona, is expected to begin construction in early 2027. EVelution aims to complete the cobalt processing plant in 2029.

Binding Offtake Improves Project Bankability

The Mitsui agreement gives EVelution a clearer demand base before construction begins. For a new cobalt processor, a binding offtake agreement can improve financing prospects by showing that future output already has a committed buyer.

This matters because processing projects require large upfront capital, technical qualification and long commissioning timelines. Buyers also need confidence that the producer can deliver metal consistently to specification.

Mitsui’s role adds strategic weight. Japanese trading houses often connect raw materials, processing assets and downstream manufacturers through long-term supply agreements.

The deal also strengthens Japan’s access to non-China cobalt metal. Japan has major battery, electronics, automotive and industrial materials sectors, and secure cobalt supply remains important for several high-value manufacturing chains.

For EVelution, the agreement supports a route into the market before commercial production starts. It also helps position the Arizona facility as part of a wider allied supply-chain network rather than only a domestic US project.

US Cobalt Processing Remains a Strategic Gap

The Arizona project addresses a key weakness in the US critical minerals chain. The country needs more domestic and allied refining capacity for materials that support batteries, aerospace, defence, chemicals and advanced manufacturing.

Cobalt supply is globally concentrated, with mining and processing exposed to geopolitical, environmental and trade risks. Building US processing capacity can reduce dependence on external refining routes and improve supply security for manufacturers.

The facility’s planned output of up to 3,000 t/yr under the Mitsui agreement would not transform the global cobalt market alone. However, it could provide an important domestic source of cobalt metal for customers seeking traceable and secure supply.

Cobalt’s end-use profile also makes the project strategically relevant. Battery demand remains important, but superalloys and industrial chemicals give cobalt a broader role across aerospace, energy, defence and manufacturing.

The key challenge will be execution. EVelution must move from offtake signing to financing, permitting, construction, commissioning and qualification. Each step will determine whether the project can become a reliable part of the US cobalt supply chain.

The Metalnomist Commentary

The Mitsui deal shows that critical minerals projects increasingly need customer commitments before they can become bankable. For US cobalt, the strategic question is no longer only resource access, but whether domestic processing projects can reach commercial scale on time.

Chinese Cobalt Prices Expected to Decline Further in 2025 Amid Rising Supply and Weak Demand

Chinese Cobalt Manufacturing

Oversupply and Weak Demand to Push Cobalt Prices Lower

The Chinese cobalt market is set to experience further price declines in 2025, as increasing nickel and copper production, from which cobalt is a by-product, leads to an oversupply that buyers are struggling to absorb.

Currently, Chinese-origin cobalt metal traded in Europe has already seen significant pressure due to a lack of floor pricing on raw materials, a trend expected to persist into the new year. Market insiders suggest that cobalt prices could drop below $9/lb, as fully integrated Chinese producers view cobalt as a credit to their primary metal production, particularly nickel and copper.

For these refiners, cobalt is a secondary concern. As one trading firm explained, some Chinese producers operate with production costs as low as $4,000 per ton while selling at $9,000 per ton. Even if they incur a $50 million loss on cobalt, they may still profit significantly from copper production, which can generate up to $700 million in gains.

Chinese Refiners Likely to Continue Production at a Loss

Unlike non-Chinese refiners, which may curtail supply if cobalt prices fall below $9/lb, some Chinese integrated mining firms and refiners could continue refining hydroxide into metal at a loss-making $7-8/lb.

While there is speculation that some Chinese metal producers may attempt to negotiate floor prices in their contracts, it remains uncertain whether these efforts will succeed. Market participants are closely watching how these negotiations unfold, as they could provide some level of price support if successful.

Global Nickel and Copper Growth to Sustain Cobalt Oversupply

The primary factor driving cobalt’s oversupply is the continued expansion of nickel and copper production, as cobalt is a by-product of both metals.

• Nickel production is set to rise again in 2025 with the launch of new Class 1 nickel refineries in China and Indonesia. This will likely keep London Metal Exchange (LME) three-month official nickel prices within the $15,000-17,000 per ton range, significantly lower than the $30,000 per ton peak in early 2023.

• Copper production is also projected to increase due to expansions at mines such as Kamoa-Kakula in the Democratic Republic of Congo (DRC). Although cobalt sales represent only a minor portion of copper mining revenues, producers still aim to extract value from it as a credit.

Weakened Demand from EV and Chemicals Sectors Further Pressures Prices

While cobalt demand in China has surged by 40%, this has not been enough to counteract weakening demand in other regions, particularly in Europe:

• The electric vehicle (EV) sector in Europe has slowed down, leading to reduced demand for cathode active materials like cobalt.

• The European chemicals industry, particularly in Germany, has struggled due to rising energy costs and broader economic challenges.

Even if prices do increase, China has ample spare refining capacity and could use third-party tolling arrangements to process hydroxide into metal, further maintaining downward price pressure.

Peak Oversupply May Be Near, But Price Recovery Remains Uncertain

Some market participants believe that cobalt hydroxide oversupply may have already peaked. The shift towards lithium iron phosphate (LFP) batteries, which do not use cobalt, has significantly impacted the demand for nickel-cobalt-manganese (NCM) battery chemistries, leading to lower demand for cobalt sulfate and cobalt hydroxide.

However, despite this potential supply peak, weak demand across key industrial sectors suggests that cobalt prices are unlikely to see a strong recovery in the near term.

Conclusion

In 2025, Chinese cobalt prices are expected to remain under pressure due to rising nickel and copper production, ongoing oversupply, and weak demand from the European EV and chemicals sectors. While some believe that the cobalt market may be nearing peak oversupply, prices are unlikely to experience significant upward momentum unless demand rebounds sharply or supply reductions occur.

Electra cobalt sulfate refinery restart boosts North American battery supply

Electra Battery Materials

Electra cobalt sulfate refinery restart marks a critical step in building a localized EV battery supply chain in North America. The Electra cobalt sulfate refinery restart in Ontario aims to deliver 6,500 t/yr of battery-grade cobalt from 2027. As a result, the Electra cobalt sulfate refinery restart strengthens regional security of supply and reduces reliance on imported cobalt chemicals.

Government-backed financing underpins refinery construction

Electra secured $82mn in project financing to restart construction after 2023 financial and supply chain setbacks. The funding includes $48mn from the US Department of Defense and the Canadian federal government, highlighting cobalt’s strategic importance. Meanwhile, Invest Ontario added C$17.5mn, reinforcing Ontario’s ambition to become a battery materials hub.

The refinery will produce battery-grade cobalt sulfate, a key precursor for high-nickel and cobalt-bearing cathode chemistries. This production will support EV and energy storage manufacturers seeking IRA-compliant and geopolitically secure feedstock. The project also fits broader efforts to onshore critical minerals refining in North America.

Integrated cobalt feedstock strategy across Canada and the US

Electra is already testing feedstock for the refinery at its Ontario laboratory. The company uses material sourced from historic Cobalt Camp and the Iron Creek copper-cobalt project in Idaho. This integrated approach links upstream mining projects directly with midstream refining capacity.

The firm plans a rapid scale-up in staffing as construction resumes. Headcount will rise from 30 to 150 early next year, supporting engineering, operations and ESG compliance. If execution stays on track, the refinery could become a cornerstone asset in the regional cobalt chemicals ecosystem.

The Metalnomist Commentary

Electra’s move shows how policy support and blended public-private capital can unlock stalled midstream projects in critical minerals. For cathode producers and automakers, an additional Western cobalt sulfate source offers both supply diversification and regulatory advantages. The key watchpoint now is execution risk on capex, commissioning, and reliable feedstock flows from Canada and the US.

Sherritt Nickel and Cobalt Production Declines in Q1 2025

Sherritt International

Sherritt nickel and cobalt production dropped significantly in the first quarter of 2025. The Canadian miner reported an 18% decline in nickel output to 2,947 tonnes and a 6% decrease in cobalt production to 323 tonnes. Despite these setbacks, the company maintained its raised full-year guidance, signaling confidence in its operational outlook. The Sherritt nickel and cobalt production update reflects both current challenges and anticipated recovery.

Moa Expansion Faces Sanctions but Offers Hope

Operations at Sherritt’s Moa joint venture in Cuba were affected by intensified U.S. sanctions, limiting output capacity. However, the company initiated Phase 2 of its expansion project at the site. Full ramp-up is expected in the second half of the year, which could restore Sherritt nickel and cobalt production to targeted levels. CEO Leon Binedell emphasized that this expansion is critical to meeting future demand, especially in energy transition sectors.

Cobalt Sales Rise Despite Falling Prices

While production declined, cobalt sales rose 26% to 456 tonnes, outpacing actual output. This suggests strong downstream demand, particularly from battery manufacturers. In contrast, nickel sales fell 15% to 3,439 tonnes. Price trends diverged: cobalt’s average realized price fell 8% to C$13.29/lb, while nickel edged up 1% to C$9.98/lb. Sherritt expects cobalt prices to rebound in the second quarter, potentially improving margins.

The company posted a C$40.6 million loss, nearly flat from a year earlier. However, revenue rose 33% to C$38.4 million, supported by strategic inventory sales and resilient market demand. This financial performance demonstrates that even amid operational pressure, Sherritt’s market positioning remains strong.

The Metalnomist Commentary

Sherritt’s first-quarter results highlight the fragility of critical mineral supply chains under geopolitical stress. Yet its decisive investment in Moa and steady demand for cobalt offer a realistic path to recovery in 2025.

Global Cobalt Supply Expected to Rise in 2025, Driven by Increased Production in Indonesia and China

Global cobalt supply is poised for significant growth in 2025, according to Fan Ruize, senior analyst at Antaike, a leading Chinese state-owned information provider. The expansion in production, fueled by rising output in Indonesia and China, is set to meet the increasing demand for cobalt in various high-tech industries, including electric vehicles (EVs), power batteries, and robotics.

Increased Global Cobalt Feedstock and Refined Production

At the 2024 Nickel and Cobalt Industry Annual Conference in Nanchang, China, Fan Ruize projected that global cobalt feedstock production would reach 290,000 tons of metal equivalent in 2025, up from 272,000 tons in 2024. A significant portion of this increase is expected to come from the Democratic Republic of the Congo (DRC), which will continue to be the world's largest producer, contributing 203,000 tons. Indonesia will also play a crucial role, contributing an additional 32,000 tons of cobalt feedstock.

Refined cobalt production is projected to rise to 240,000 tons of metal equivalent in 2025, marking a 4.8% increase from the previous year. This rise in refined cobalt production is primarily driven by increases in output from China and Indonesia, with China's contribution set to reach 195,000 tons in 2025, up from 179,000 tons in 2024. China's rapid expansion in refined cobalt capacity—anticipated to hit 75,000 tons by 2025—indicates the country's growing role as a key player in the global cobalt market.

Surplus Supply and Price Outlook

With refined cobalt consumption expected to reach 215,000 tons in 2025, up 3.4% from 2024, the cobalt market is likely to experience a continued supply surplus. Fan Ruize forecast that this oversupply will put downward pressure on cobalt metal prices in the near future. While China's refined cobalt consumption will continue to rise—projected to reach 130,000 tons in 2025—the increase in supply from Indonesia and China is expected to result in price fluctuations at lower levels.

Fan also noted that the increasing output of cobalt metal would diminish the price premium for cobalt over cobalt sulfate, further contributing to the price decline. Despite this, the continued demand for cobalt in sectors such as artificial intelligence (AI), unmanned aerial vehicles (UAVs), and electric vehicles (EVs) is expected to drive long-term consumption.

Market Drivers: Cobalt in High-Tech Industries

The growing demand for cobalt in the power battery, alloy, and electric vehicle industries is a key driver behind the rise in cobalt consumption. Additionally, the rapid expansion of artificial intelligence, robotics, and unmanned aerial vehicles will further contribute to the demand for this essential metal. As the global economy transitions to more sustainable technologies, cobalt’s role in powering innovation will continue to expand, supporting the metal's long-term market growth.

Conclusion

The cobalt market is set to see substantial changes in the coming years, with a sharp increase in supply expected in 2025, particularly from Indonesia and China. Despite potential price fluctuations caused by oversupply, the long-term demand for cobalt in high-tech applications, including EVs, AI, and power batteries, will ensure that cobalt remains a critical resource for the global economy.