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Cobalt (The next Uranium)


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Yep - just like the much hyped graphite boom, the lithium boom the cobalt boom has has blown up - for the time being. All those who rushed and made it into production are struggling. Down the spec end, the ones still kicking around rock chips, the promoters are exiting into the next hot thing :biggrin:


Moral to the story - in any boom get in early (on the "pie in the sky" hype) then get out fast (when reality bites).


Not to say we won't see another boom in battery materials - but not just yet IMHO

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Miners find out the hard way why cobalt is called the goblin

Bloomberg News | August 7, 2019


For Glencore, the precipitous fall in cobalt is more bruising because the metal, a key ingredient for batteries, was its shining star back in 2017. The miner made its copper and cobalt assets a big part of its selling pitch to investors, touting the future boom in electric cars and global urbanization.


But the strategy hit pitfalls. Excess supply has overwhelmed demand for battery materials and because itâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s a niche market, Glencore hasnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t been able to hedge its exposure to cobalt, leaving the metals trading business exposed to losses. To make matters worse, Glencore detected uranium in some cobalt last year, rendering it unsaleable.


To be sure, Glencore isnâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t giving up on Mutanda entirely. It expects to bring it back online in 2021 and is looking at a new mine plan that could boost production over the long term. The restart might coincide with electric cars becoming more popular with consumers, which would boost demand.


That could leave Glencoreâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s traders on a strong footing as they negotiate supply deals with customers who pulled out of contracts when prices were weak. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“People who have reneged on us in the past, of course theyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢re not going to be top of our list,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Glasenberg said.


read more - https://www.mining.com/web/miners-find-out-...led-the-goblin/

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Cobalt to share EV battery duties with nickel

At Ahead of the Herd we believe both cobalt and nickel sulphide will share the EV battery limelight. However, because of the scarcity of nickel sulphide deposits the junior resource company that already owns, and can develop a nickel sulfide deposit at tidewater, with enough scale to actually become a mine, will have major base metal mining companies like BHP, Vale, Glencore and Sherritt pounding on its door.

read full article -> https://www.aheadoftheherd.com/Newsletter/2...with-nickel.htm

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Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Huayou pulls out of Congo cobalt mine investment after price slump

Reuters | August 16, 2019 | 9:23 am

Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s biggest cobalt refiner Zhejiang Huayou Cobalt said on Thursday its overseas unit is pulling out a deal to invest $66.3 million in a cobalt mine in the Democratic Republic of Congo (DRC) after prices of the metal slid.


Huayou International Mining had agreed to take a 51% stake in Lucky Resources Holdings Co Ltd, whose wholly owned subsidiary New Minerals Investment holds the DRCâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s 13235 mining licence, in December 2017.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“After signing, the market environment has undergone quite a big change,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Huayou said in a filing to the Shanghai Stock Exchange. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The price of cobalt products has fallen sharply and profitability has dropped sharply.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ




Prices of cobalt, a key ingredient in batteries for electric vehicles, have fallen by around two-thirds from their April 2018 peak of near $100,000 a tonne, and currently stand at $32,600 a tonne on the London Metal Exchange.


They have however shot up more than 25% this month, driven largely by Glencoreâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s confirmation on Aug. 7 that it was shutting its Mutanda copper and cobalt mine, also in DRC, the worldâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s biggest cobalt producer, for two years.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“After friendly consultation with the other party, the two sides agreed to terminate this outward investment cooperation,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Huayou said.


The company had so far paid only $9.95 million of the agreed price, half of which will be returned by September 2020 and the remainder by June 2021, according to the filing.


Huayou, primarily a cobalt refiner that makes chemical products such as cobalt hydroxide and cobalt sulphate, operates the PE527 copper-cobalt mining permit in the DRC.


(Reporting by Tom Daly and Yilei Sun; Editing by Jan Harvey)







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Glencore could do for cobalt what it did for zinc âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ double the price

Frik Els | August 20, 2019

A new report by Capital Economics urges cobalt bulls to be patient, pointing to Glencoreâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s similar action in 2015 to shore up the zinc market, which lead to a doubling of the price in fewer than three years.


Ross Strachan, senior commodities economist at Capital Economics, predicts a near doubling in the price by end-2021 from the level before the Mutanda care and maintenance news:


We think that this mine closure will eradicate the surplus in the cobalt market and we now forecast the market to be in a small deficit in 2020 and 2021.


Crucially this is underpinned by strong demand due to our expectation of rapid growth in electric vehicle production.


This will offset the increase in supply from the existing pipeline of projects, including Glencoreâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Katanga, and a likely upturn in artisanal mining, which had slumped this year in conjunction with the price.


London-based Capital Economics predicts cobalt to reach $40,000 by the end of next year and add another $10,000 by the end of 2021.


However, the independent research company cautions that the price is unlikely to return to its 2018 peaks, as Glencore would return to the market before then.



Chinaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s skepticism of Mutanda closure characteristic of short-term procurement strategy

Cobalt prices have risen by more than 25% since Glencore announced it would close its Mutanda mine and in doing so bring forward expectations of a shortfall in cobalt supply.


But with other projects ramping up or in the pipeline, stockpiles to be worked through, and a short-term approach to raw materials procurement, Chinese battery-related buyers are skeptical they will be affected by tightness in the near term.

Restocking ahead of late 2020 momentum

With the short-term approach to procurement, focus on ramping up supply that still leaves the cobalt market in a surplus next year, and relative flexibility around battery chemistries and associated cobalt demand, Chinese buyers are confident they wonâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢t face a shortage in the near term.


But a deficit is on the cards longer term. According to Fastmarketsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ research analysts, cobalt demand from the EV sector will reach 75,000 tonnes in 2025, up from 9,500 tonnes in 2017.


In the fall-out from the Mutanda announcement, market participants outside China are looking at their longer-term strategy again.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“A lot of the downstream [buyers] are incorrectly skeptical,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ the first trading source said. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The news just told me to get longer, sooner.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ


Furthermore, some market participants told Fastmarkets the optimism, and recent price increases, is underpinned by the outlook for better demand from the battery sector in the fourth quarter, which had already been translated into rebounding cobalt metal prices and hydroxide payables even ahead of the announcement.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We see a possible knee-jerk reaction up to $18 sometime in August and September, but then consolidation before the price picks up again in the second to fourth quarters in 2020,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Adams said, with sustainable price momentum materializing from late next year.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We see the refined market remaining in a surplus next year, but the stock drawdown will be very constructive and that should support prices later next year and then meaningfully in 2021,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Adams added.


The benchmark standard grade cobalt price will average $16-16.50 per lb in the fourth quarter and first half of 2020, rising to $18-19 in the second half of next year, according to forecasts from Fastmarketsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ research team.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“One cut can make all the difference but stocks need to be drawn down first,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Adams said.


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China Molybdenum says giant Congo copper mine is losing money

Bloomberg News | August 21, 2019

China Molybdenumâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s warning to employees comes as Congoâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s entire extractive industry is under pressure after a revised mining code was signed into law in March last year, raising taxes and canceling a clause that would have protected producing mines against fiscal changes for another decade. The government then imposed a 10% royalty tax on cobalt producers eight months later.


Glencore Plc said earlier this month that it will shutter its Mutanda project for about two years in a bid to put a floor under the cobalt market, which has seen prices fall more than 70% since April last year.


Cobalt collapse

Those setbacks highlight how quickly cobalt has shifted from a prized asset to a headache. After quadrupling in two years, prices have collapsed to the lowest since 2016 as new supplies pour into the market. The copper price has dropped by about 5% over the past year.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Despite the adverse environment and difficulties painted above, in order to preserve jobs and keep current benefits, the new management team, with the support of shareholders, has developed a business revitalization and development plan to face the risks,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ China Molybdenumâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s unit said.

read more - https://www.mining.com/web/china-molybdenum...s-losing-money/

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Canadaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Fortune Minerals scales back mine on weak cobalt

Reuters | October 3, 2019

Canadaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Fortune Minerals Ltd said on Thursday it would shelve plans to upsize its early-stage cobalt mine in the countryâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s far north while it continues to hunt for a strategic partner.


The companyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s decision to scale back plans at its proposed Nico development in Canadaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s Northwest Territories comes after cobalt prices, hit by oversupply, have fallen from $47,000 per tonne in January to around $35,470.


Falling prices for the critical battery ingredient prompted Glencore in August to halt output for two years at its giant Mutanda copper and cobalt mine in the Democratic Republic of Congo.


London, Ontario-based Fortune Minerals said current prices do not justify expanding the daily mill production rate to 6,000 tonnes from 4,650 tonnes at its proposed Nico project, which would also produce gold and bismuth.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“An environment that has seen curtailment from the worldâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s largest cobalt mines is not conducive for an expanded, capital intensive project at this time,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Chief Executive Robin Goad said in a statement.


The company said it is continuing discussions with potential strategic partners.


(By Jeff Lewis; Editing by Franklin Paul and Chris Reese)


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GEM signs five-year, 61kt cobalt hydroxide supply contract with Glencore [uPDATED]

Chinese cobalt producer GEM Co Ltd has signed a cobalt supply contract with Switzerland-based miner-trader Glencore, locking in cobalt hydroxide supply for the next five years, the companies announced on October 7.


Glencore will supply GEM, including four of its wholly-owned subsidiaries, with at least 61,200 tonnes of cobalt hydroxide between 2020 and 2024.


According to the agreement, GEM will purchase 13,200 tonnes of cobalt hydroxide in 2020, and 12,000 tonnes per year in the following four years.


Furthermore, Glencore will give priority to GEM to supply the latter with additional cobalt hydroxide outside the above strategic procurement scheme, GEM said in its announcement dated September 30 and published on its website on October 7.


The supply agreement will meet GEM's increasing demand for cobalt raw materials due to its business expansion on battery raw materials for the next five years, GEM said.

read more - https://www.metalbulletin.com/Article/38975...-with-Glencore-[uPDATED].html

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Comments on the closure of Glencore's Mutanda mine in DRC - many suggested it would cause a supply shortage


Cobalt market to avoid shortage despite Congo mine closure: Nornickel


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“The fact that one mine is being removed from supply does not radically change the situation - we do not have a shortage of the metal,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Anton Berlin, head of Nornickelâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s marketing department, told Reuters. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We do not see a structural problem for the market.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ


Nornickel, the worldâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s eighth largest cobalt producer with about 3% of global output, mines the metal in mixed ores in its Arctic deposits along with nickel, palladium, copper and platinum.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“In most cases, the cobalt market is in surplus,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Berlin said. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Probably because it is a by-product, no one limits (its production) because of low prices.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ


Speaking ahead of LME Week, a gathering of the metal industry in London this week, Berlin also said Nornickelâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s battery materials project with Germanyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s BASF was unlikely to be affected by lower cobalt prices.


BASF is building a factory to make cathode materials for electric car batteries in Finland, close to Nornickelâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s nickel and cobalt refinery, which supplies raw materials to the project.


While cobalt consumption is still growing, Nornickel sees expectations for demand as overstated as the industry focuses on boosting the nickel content of batteries at the expense of cobalt, part of a bid to increase energy storage capacity.


read more - https://www.reuters.com/article/us-metals-l...l-idUSKBN1X81QZ

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