Australian mining company Jervois Global is implementing cost-cutting measures and reducing jobs due to a significant slump in cobalt prices, which it attributes to oversupply from China.
In a filing with the stock exchange, the cobalt and nickel producer announced the elimination or conversion to part-time status of 30% of its senior corporate management positions. Additionally, fees for non-executive directors have been reduced by the same percentage.
Jervois also disclosed that approximately 5% of its workforce at its project in Finland have been laid off.
In a press release on the company’s website, Jervois said that bonuses will not be paid to its CEO, and corporate salaries will be frozen throughout 2024. In the same press release, the company pinned the blame for its falling profits on “adverse cobalt market conditions caused by Chinese overproduction and its impact on pricing”.
China processed around 80% of the global cobalt supply last year, and the Democratic Republic of Congo (DRC) and Indonesia have also been producing more of the metal, which is a vital part of many modern battery systems.
As a result of the news, Jervois saw its stock price plummet. Prices hit a low of A$0.03 on the Sydney Stock Exchange as of 11:35 local time. This is a significant dip from Jervois’ peak stock price of April 2022, which hit a high of A$0.96.
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By GlobalData
A recent GlobalData report predicted that global cobalt production levels are expected to rise for the fourth year in a row. Production is expected to hit 231.5 kilotonnes in 2024, an increase of 6.5% from 2022 levels. According to the report, “increased supply from the DRC and Indonesia will primarily support the growth in 2024”, with the restart of the DRC’s Kinsanfu mine in mid-2023 being a major contributor to the country’s output rise.
