KFM cobalt project accelerates to boost mid-term growth (+ve)
KFM cobalt project accelerates to boost mid-term growth (+ve)
CMOC Group (3993 HK) has disclosed positive progress of its KFM project’s latest development to bring target output of 67,000 tons cobalt and 550,000 tons copper in 2025, up from prior 37,000 tons and 450,000 tons respectively.
According to the development plan, the mine could commence with its upgraded production capacity by 1H2023. We believe that CMOC Group to accelerate its expansion in KFM project would alleviate the keen demand arising from the new energy industry.
Based on the estimate by the International Cobalt Association a month ago, the demand for cobalt will increase from 175,000 tons in 2021 to 320,000 tons in the next five years, whereas global cobalt metal supply will be 160,000 tons in 2021. There is still a undersupplied.
We reiterate our view that CMOC Group’s earnings to be driven by accelerating cobalt volume growth. We maintain our BUY rating and TP of HK$8.0