A Chinese battery firm has simply failed to issue letters of credit (L/Cs) to renege on a three-year contract to buy cobalt hydroxide from miner-trader Glencore.

This is the latest in a string of problems Glencore's operations have faced recently in the Democratic Republic of Congo where it has deep interests in copper mines.

Price crash

Chinese battery firm GEM has stopped buying cobalt from miner-trader Glencore as the price of the battery material crashed below that agreed in a three-year deal between the two firms signed in March 2018, Reuters reports.

One source told the news agency, "they didn't open the L/Cs and said to Glencore, sorry, but we can't take it at the agreed price."

Copper by-product

Cobalt hydroxide is a by-product of copper used to make sulphates required for the manufacture of lithium-ion batteries. The Democratic Republic of Congo holds the world's largest reserves of cobalt.

Over recent months Glencore has faced a barrage of charges from financial watchdogs in Canada, the UK and the US of misstating its finances and corruption related to its operations in the country.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.