CHINA’S National Food and Strategic Reserves Administration has asked the country’s major cobalt producers to submit proposals to sell their metal to the State, sources with direct knowledge of the matter said.

The government was earlier this year urged by the country’s nonferrous metals association to take advantage of a coronavirus-driven slump in commodity prices and stockpile metals, which would also support struggling producers.

Cobalt industry sources estimate China’s stockpiler could be holding up to 7,000 tons of cobalt metal, typically used to make alloys for the aerospace industry. The metal can also be turned into chemicals for the batteries used in mobile devices and the fast-growing electric vehicle sector.

Jinchuan Group, which owns cobalt mines in China and the Democratic Republic of Congo, had received tender documents from the administration, a source at company said.

Two sources at Chinese battery firm GEM Co., the parent firm of KLK with cobalt metal approved for delivery against London Metal Exchange contracts, said the company had sent people to Beijing last week to pick up the tender.

Industry sources said bids have to be submitted this week, but that no details of the volume or the price the administration was looking for were available.

A spokesman from the press office of the administration said he didn’t know about the tender.

Jinchuan Group and GEM did not immediately respond to requests for comment.

China accounts for about half of global consumption of industrial metals.

According to the U.S. Geological Survey, China produced 2,000 tons of cobalt last year from local resources.

(SD-Agencies)