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Cobalt (The next Uranium)


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The next Uranium?!?!?!?

 

but wait, there's an alternative power supply

Lithium tends to bask in the glory brought on by the world's new-found enthusiasm for what goes into batteries. However, its fellow component in all things electrical (be they laptops, smartphones, aircraft parts, prosthetics...), cobalt is gearing up for its time to shine.

 

"If you look at the constituents of a battery, cobalt's the one that's hardest to solve, in terms of supply," says Julian Babarczy, head of Australian equities at Regal Funds Management. "Even though the demand and future is there, it's quite a difficult one to play, there are very few listed entities, but the story is a good one. So we've had to look down the value curve at some companies that look like they could make it into production."

 

But those companies are few and far between. ....

 

http://www.afr.com/content/dam/images/g/r/p/p/l/o/image.imgtype.afrArticleInline.620x0.png/1474960593312.png

 

Cobalt is mostly a byproduct of nickel and copper operations, with only 6 per cent of global supply stemming from primary cobalt mines. The Democratic Republic of Congo has the biggest operation and accounts for roughly 60 per cent of global cobalt production.

 

However, the dangerous conditions of the Congo mines have earned the nickname "conflict minerals" or "blood metals" and Amnesty International recently released a damning report highlighting the conditions of children labourers in parts of the DRC.

 

Amnesty went on to point out that Chinese companies, easily the biggest demand for the commodity and which provide 52 per cent of refinery production, buy the bulk of cobalt from these unsafe and unethical mines and then onsell to mobile-phone and laptop makers such as Apple and Samsung Electronics.

 

"It's been a headache for those electronics guys who are now looking around to find other cobalt suppliers," says Ben Cleary, portfolio manager at TriBeCa Capital. "It's an important element in their products and 49 per cent of the cobalt market goes into rechargeable batteries."

 

Aside from the very few pure cobalt plays, the remaining 94 per cent of global supply hinges on the developments in nickel and copper markets.

 

"It makes it hard for investors because cobalt demand is forecast to grow at a greater rate than copper and nickel demand," says Mr Cleary. "It means an excess amount of primary metals will need to be mined and refined in order to meet the world's growing cobalt needs. One sort of has to rely on the other."

 

But the demand story is a compelling one, with some analysts expecting global demand for refined cobalt will exceed the 100 kt mark next year and could exceed 150,000 tonnes by 2025.

 

"The increasing popularity of Li-ion batteries in electric vehicles and a range of modern electronic devices leads us to forecast cobalt demand for these applications to grow by 8 per cent per annum for the next five years," says Edward Spencer, mining and metals analyst at CRU in London. "If mining and refining capacity growth fails to keep pace we could see a considerable deficit opening in the market before the end of the decade."

 

These impressive demand figures haven't flowed through to the price as of yet; cobalt prices during the last two years have ranged between $US13-15/lb ($17-19.50/lb or $34-40/kg).

 

"Cobalt isn't undersupplied just yet," says Regal's Mr Babarczy. "But given what we think the battery demand will do, I think there's a good chance projects will get financed.

 

Investors could once get exposure to cobalt through nickel and copper shares, however as those markets languish, a few opportunistic miners are plotting to exploit cobalt rich deposits.

 

One such play is ASX-listed Clean TeQ which has a scandium deposit in central New South Wales. The stock was bumbling along at 17ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ for most of the year before it became clear there was great potential stemming from its nickel and cobalt potential.

 

"We think it's the most exciting and the most advanced," says Mr Babarczy, who has invested in the Australian company. "It's not a tiny project and they've got pretty big aspirations, but there's very few projects out there in the world at this stage and the bulk of it comes from places people don't want to go to."

 

Billionaire Canadian investor Robert Friedman has taken an almost 20 per cent slab of the company's stock and is a vocal proponent of the cobalt story. TriBeCa Capital is also exposed to the cobalt story, but in Canadian explorer eCobalt Solutions.

 

"I'm not sure what it is with cobalt companies and terrible names," says Mr Cleary. "But this company's Idaho Cobalt Project remains the sole primary, advanced stage and near term cobalt deposit in the US."

 

The company has already spent $100 million on drilling and feasibility studies and during the last cobalt commodity price rally the stock was fetching around $6.60 a share. But since then has slumped back to around 60ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ a share.

 

"The cobalt market is a bit slower than the lithium market and it takes a bit of work to find a way to gain exposure," says Mr Cleary. "But rechargeable batteries are only going to be in higher and higher demand, so it makes sense for us."

Read more: http://www.afr.com/markets/commodities/app...c#ixzz4LRdxEfnd

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  • 2 months later...
Cobalt Blue (COB) is a pure-play cobalt focussed energy solutions company, which was incorporated on 26 August 2016 for the express purpose of advancing the development of a cobalt mining operation, the Thackaringa Cobalt Project in New South Wales, Australia.

 

The Company is also seeking to invest in energy storage (battery) technologies that may complement the production of cobalt in commercialising battery and associated energy storage technologies. Of particular interest is the life cycle of rechargeable batteries from 'cradle' to 'grave' and how such technologies can be used to grow the green energy industry in Australia and around the world.

ASX stated it would list on 16 Dec but at CoB Friday, nothing on the boards for COB
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  • 1 month later...

Cobalt Blue COB listed on 02 Feb 2017, at 20c a share.

 

Opened near 27c but at CoB last night, back to 20c

 

A world away from the scandal-hit mining industry of the Democratic Republic of Congo stands the Thackaringa project in NSW's mining heartland of Broken Hill, said to host one of the world's largest undeveloped cobalt reserves.

 

The directors of project developer Cobalt Blue Holdings are positioning their new mining play as an answer to the "conflict metals" problem plaguing the DRC's mining industry.... It is not just the damning reports about child labour and unsafe conditions in the cobalt mines of the DRC, supplier of about 60 per cent of global cobalt demand, that are playing in favour of Australia's new breed of aspiring players.

 

"The larger companies will look to ethically source their cobalt," says Joe Kaderavek, chief executive of Cobalt Blue and a former Deutsche Bank head of resources. "We could well find the supply/demand tensions could get worse," he said of the market already growing at about 8 per cent a year.

 

In a sector where 98 per cent of cobalt is co-produced with nickel and copper, Cobalt Blue counts itself among the rare breed of pure-play companies... Cobalt is an essential ingredient of lithium-ion batteries and of superalloys that are increasingly used in aircraft.

 

A spin-off from Broken Hill Prospecting (ha !) that is understood to have raised its IPO maximum of $10 million, Cobalt Blue is due to start trading on the ASX on January 31 following a delay after the ASX demanded an upgraded resource assessment. That has been provided in a replacement prospectus lodged with the Australian Securities and Investments Commission. The shares were sold at 20ÃÆâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¢ apiece.

 

The Thackaringa project hosts an inferred resource of 33.1 million tonnes at 833 parts per million of cobalt, and an exploration target of 40 million-66 million tonnes at 600-900 ppm. Its location on the outskirts of Broken Hill ensures access to skilled mine workers, electricity and water supplies and close access to a railway that would take product 400km to Port Pirie in South Australia for eventual export.

 

The venture is, however, at an early stage, with management aiming to have a bankable feasibility study for the project and all approvals in place by July 2019. Two years of engineering, development and construction would follow.

 

Chairman Rob Biancardi has carefully been forging relations with potential end customers, including Tesla, which hosted the launch of Cobalt Blue's IPO at its sleek showroom in Sydney's Martin Place.

 

The IPO also has received an unusual endorsement from NSW mining minister Anthony Roberts and has been strongly endorsed by local government and the state opposition, noted Mr Biancardi, ...... the offer has also attracted plenty of retail interest as well as from social and ethical investment funds, Mr Biancardi said.

AFR

 

A few things that don't necessarily pass the 'pub test'

1. Broken Hill Prospecting = joke

2. "ASX demanded an upgraded resource assessment"

3. "sleek showroom in Sydney's Martin Place"

4. "plenty of retail interest as well as from social and ethical investment funds" - only $10 mill, boys. Early days, pre-feasibility. 2021 at earliest

5. early profit taking (insiders?)

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A few companies, meanwhile, have begun to respond to pressure for more disclosure, and some industry groups have initiated efforts to promote industry standards for the sourcing of cobalt.

 

Apple annually publishes a list of its top suppliers, a rare move in an industry that prefers to keep supply details secret. And Umicore, a major supplier of battery parts, has hired the accounting firm PricewaterhouseCoopers, to judge whether it has adhered to its standards for making sure its cobalt is sourced responsibly.

But these efforts are the exception within the many industries reliant on lithium-ion batteries.

 

"It's important for companies to demonstrate what they're doing and go beyond a mere verbal commitment," Jurewicz said. "Companies that do anything beyond what is required by the [Dodd-Frank] law are few and far between."

Is a Tesla really ethical? Company won't say how its batteries aren't tainted .. article in The Washington Post

 

Tried looking for applicability of Dodd-Frank; yes, it is written to protect consumers, as one of the 8 main components - main ones are to regulate financial markets, and on February 3, 2017, President Trump signed an executive order asking the U.S. Treasury Department to revise Dodd-Frank regulations. How this will impact, I have no idea.

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getting a 'true Cobalt play' is challenging, for sure. Most ASX listed ones are, by dint that Co is an associated mineral (the goblin ore as described by German metallurgists and thought of as having no value, for centuries), merely touting the Cobalt content recently because of price upkick

 

the Equatorial resources link is unusual, in that Co content is put in % terms, rather than ppm

 

Talga TLG recently put out a release mentioning Co in their Swedish iron ore leases

 

Platina Resources PGM cite Cobalt in WA mine resource

 

JRV is mentioned; ditto MCT in WA . Must look further

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  • 2 weeks later...

Cobalt, the next Lithium

The lesser known mineral component of batteries, cobalt, is gearing up to have its year in the sun, with hedge funds stockpiling the commodity in preparation for the "Tesla boost", ethical dilemmas tainting existing supply and miners exploring the developed world.

 

Prices for the mineral are starting to see a conspicuous recovery; low-grade cobalt was at a high of $US16.50 ($21.84) a pound on the spot market on Thursday, up more than 80 per cent from lows in December 2015, according to Bloomberg data.

 

"If last year was lithium's time, for 2017 its battery peer cobalt may be the one receiving more attention," a Macquarie analysts wrote in a recent note to clients. "Prices have accelerated to levels last seen in 2011, and with demand from the core portable electronics sector recovering and supply growth relatively stagnant, this can be fundamentally justified."

 

...The hard, grey mineral has piqued interest in recent years for its potential widespread use in smartphones and the lithium-ion batteries used in Tesla vehicles. As an efficient electrode, cobalt can help store power for longer. Analysts expect the likes of General Motors and Volkswagon, in addition to smartphone makers Apple and Samsung, to soon crank up demand as they experiment with their own electric cars.

 

According to commodity researcher CRU Group, this is set to boost demand for the nickel byproduct on average by 16 per cent annually through to 2022.

 

The supply issue

 

Cobalt is particularly contentious, however, given it is largely mined in the strife-riddled region of the Democratic Republic of the Congo. China is the main refiner of cobalt, buying up the commodity from both ethical and conflict zones, refining it and then on-selling it to the likes of Apple, Samsung and Tesla.

 

"The problem is it all gets mixed together, so you don't really have an option to buy clean cobalt," said Matthew Langsford, portfolio manager of the natural resources fund at Terra Capital.

 

At this year's African Mining Indaba, which finished up last week in Cape Town, cobalt sprung up at numerous booths, with companies turning their exploration sights towards the commodity which is usually found as a byproduct of nickel. However, investors seem to be leaning towards more transparent sources of cobalt.

 

"It's a chilling fact for a lot of people that the smartphone in the pocket probably contains cobalt produced through child labour," Edward Lauer, head of portfolio optimisation at Eurasian Resources Group, told a panel during the conference. "It's a complex supply chain and a challenging issue; thankfully, a lot of groups are bringing various stakeholders together."

AFR
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