CMOC Targets Growth and Stability Amid Global Uncertainty

CMOC Targets Growth and Stability Amid Global Uncertainty

China’s CMOC Group, a leading producer of copper, molybdenum, and the world’s largest cobalt producer, is confidently navigating global uncertainties. Despite the volatility in geopolitics and market dynamics, the company is poised for growth, with a clear strategy for diversification and expansion. At the recent FT Metals and Mining Summit on October 10, CMOC’s chairman and chief investment officer, Liu Jianfeng, revealed the company’s plans to strengthen its global presence, tackle policy shifts in the Democratic Republic of Congo (DRC), and ensure long-term stability through strategic investments in key commodities.

Managing Policy Changes in the DRC

CMOC’s flagship project, the Tenke Fungurume Mine (TFM) in the DRC, has been a focal point of geopolitical discussions, particularly regarding the DRC’s newly imposed cobalt export quota. Liu emphasized that the company is well-prepared to absorb any financial impact. “Cobalt is a byproduct of copper production — we can’t separate the two,” Liu explained, noting that the company’s copper production remains strong enough to offset any challenges posed by cobalt export restrictions. Additionally, surplus cobalt can be stockpiled until market conditions improve.

Amid the growing geopolitical tensions, particularly between Washington and Beijing, CMOC is aware of potential barriers in overseas investments. Despite these challenges, Liu reaffirmed CMOC’s commitment to global expansion. “We already have large-scale copper and cobalt operations in the DRC. If we can secure similar projects elsewhere, we could double our production and become one of the top three global copper producers,” he stated.

Targeting Copper and Gold, While Staying Cautious on Lithium

While CMOC is maintaining a cautious stance on lithium, focusing on copper and gold remains its top priority. “Copper remains our core metal,” Liu said, emphasizing its importance for the company’s growth and stability. CMOC also sees opportunities in the gold market due to its fragmented nature, offering room for expansion.

Although lithium has garnered significant investor attention, CMOC has chosen to remain on the sidelines. Liu explained, “Mining is about supply. If supply is already abundant, prices can be driven up by capital rather than fundamentals.” By focusing on metals where supply is still a critical factor, CMOC aims to deliver long-term value through production and development.

On Western Critical Minerals Policies

Liu also addressed the rising push from Western governments to secure critical minerals, asserting that this is a natural evolution of global competition. “Mining companies have to follow the policies of different countries,” he remarked. Liu noted that these policies may drive up prices across the sector, which would benefit all producers, as critical minerals should reflect their environmental and developmental value.

He drew from his oil and gas background, stating, “Technological progress often overcomes geopolitical constraints,” a sentiment he believes will apply to the mining sector as well. As such, CMOC’s growth will not be hindered by regulatory changes but will continue through innovation and adaptive strategies.

Integrating Trading to Strengthen Market Insight

One of CMOC’s key differentiators is its 2019 acquisition of IXM, a global trading firm. This acquisition has provided CMOC with a strategic marketing and logistics platform, positioning it to better understand global market trends. “If you want to understand the global mining and commodities markets, you need a presence on the ground,” Liu stated, noting that IXM’s global presence in key markets like London, the US, and Australia gives CMOC the edge it needs to stay competitive in a shifting global market.

Balancing Commercial Strategy with Chinese Roots

Liu addressed the question of whether CMOC’s strategy aligns with Beijing’s geopolitical agenda. “Our strategy is commercial,” he explained. “We define our own direction.” CMOC’s global success has been driven by its management, execution, and adherence to market logic rather than any state-directed strategy. This independence allows CMOC to grow from a local player into a global mining giant.

China’s Economic Outlook and Robust Demand for Metals

Looking ahead, Liu shared a confident outlook on China’s economy. Despite potential slowdowns, CMOC remains bullish on the future of copper and cobalt, with robust demand for these metals continuing. “We already have firm orders for the next three quarters,” he said, signaling strong and sustained demand across CMOC’s product portfolio.

SuperMetalPrice Commentary:

CMOC’s focus on strategic metals like copper and gold, combined with its ability to adapt to shifting global policies, positions it for continued growth in an unpredictable market. The company’s deliberate move into global markets, particularly through its acquisition of IXM, strengthens its presence and enhances market insights. As global demand for metals like copper and cobalt remains strong, CMOC’s cautious approach to lithium and its emphasis on copper production may allow it to remain resilient amid geopolitical and economic turbulence.