While some volatility is expected, there is optimism about the prospects of demand for cobalt and copper in 2019 which will be sustained in part by the advent of the Fourth Industrial Revolution (4IR), says diversified natural resources producer Eurasian Resources Group (ERG) CEO Benedikt Sobotka.

Sobotka, who attended the 2019 Investing in African Mining Indaba, held in Cape Town last month, says the Indaba offered an opportunity for ERG to put forward its views. These views help shape the dialogue about the main trends and opportunities for the mining sector and industry issues including the responsible sourcing of cobalt in the Democratic Republic of Congo (DRC) by the global battery sector.

ERG’s focus on the DRC was centered around ethical cobalt mining and how that contributes to advancing the electric vehicle (EV) and battery industry. “Cobalt is indispensable to the global battery sector and the 4IR and consequently demand for the metal will continue to soar. In servicing this demand, it is important that the mining industry continues to monitor and strengthen its commitment to responsible practices.”

ERG announced its copper and cobalt outlook for 2019 before the Indaba, which demonstrated the Group’s optimism for the year and provided context for a number of views it put forward at the event.

Sobotka reiterates that, “as a founding member of the World Economic Forum’s Global Battery Alliance, ERG remains committed to sourcing materials in a responsible and sustainable manner and raising the quality of life for local communities”.

Moreover, ERG considers restocking, improved investor sentiment, supply disruptions and a strong underlying demand for EVs as instrumental factors. New energy-vehicles remain the most potent driver for cobalt demand, and it is forecast that there will be stronger growth rates in 2019 than in 2018, when more than two-million battery electric and plug-in EVs were sold globally.

Sobotka adds that, visible exchange stocks finished the previous year at the lowest level in almost four years but ERG believes a strong price recovery for copper is in store as investors turn to the 300 000 t refined market deficit that ERG projects for 2019.

“Demand is healthy and will be further bolstered by the recently announced economic stimulus measures in China. It is set to outpace sluggish supply growth, which is held back by weak mine output, smelter disruptions and distortions to global scrap flows.”

In the longer term, ERG remains positive on prospects for the copper market. Sobotka states that severe underinvestment in mining projects in recent years will lead to protracted deficits, while copper demand as a consequence of EVs, renewable energy and China’s Belt and Road Initiative, all provide a strong upside