The Popularity of Electric Vehicles are Influencing Cobalt Demand

Written By: Jen Neville
November 21, 2018

cobalt

According to recent data, the global cobalt market is projected to grow at CAGR of 9.26% during the forecast period from 2018-2022. The market is being driven by the demand for cobalt as a component for batteries, electronics and super alloys. Cobalt is highly attractive to manufacturers due to its high temperature resistance, making it an ideal element to use within high powered electronic applications. The cobalt market is currently being driven by sales in consumer portable electronics such as smartphones, tablets and laptops, but the electric vehicle market is projected to take over within the next few years. Electric vehicles demand is increasing globally due to its environmental efficiency. Many countries are now looking to ban diesel-powered vehicles in order to combat rising concerns of environmental issues.

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Many major automotive manufacturers are already transitioning into the production of electric vehicles. Some manufacturers have already pledged to completely transform its business into solely electric cars. Sales of such cars are being propelled heavily by China due to air pollution concerns. Now, other nations are following China's footsteps and adopting the transition. The European Union has already begun the transition to ban carbon emissions generated from cars. Although, the market segment still remains relatively small as opposed to its counterparts, the segment is expected to witness substantial growth as technological advancements continue. [read more]

"I still believe the critical point for the cobalt market will be in 2020, when the majority of the electric vehicles are going to come to market," stated Caspar Rawles, analyst at Benchmark Mineral Intelligence. "I don't think there are any factors that could derail the cobalt story at this point."

Companies worth mention in these markets:

Declan Cobalt Inc. announced an interpretation update, based on newly acquired geophysical data and continued compilation of historical data. The Property is comprised of 15,929 ha, located in Germany and the Czech Republic. The focus of the current work program is on the historical Tisová Mine located on the Czech-German border. Multiple strata of copper and cobalt bearing volcanogenic massive sulphide and magnetite iron formations occur in the Cambrian-age strata in the Tisová Mine workings. A core drill contractor will be selected and a timeline for drilling will be formulated. Year-round drilling is feasible on the Tisová concession due to favorable terrain and excellent infrastructure.

EMX Royalty Corporation announced earlier this year its acquisition of 2,020,202 common shares of Boreal Energy Metals Corp., representing an additional 4% equity stake in BEMC, and bringing EMX's aggregate interest to 9.9% of BEMC's issued and outstanding shares. EMX acquired the additional shares pursuant to the sale of the Njuggträskliden and Mjövattnet nickel-copper-cobalt projects in Sweden. The shares were issued to EMX at a deemed price of CDN 0.05 per share. BEMC is a recently formed private company focused on battery metal assets in Scandinavia, and is a subsidiary of Boreal Metals Corporation. In addition to EMX's direct ownership in BEMC, which includes an initial 5.9% share equity position resulting from the sale of the Guldgruvan cobalt project, EMX also has an indirect ownership interest via its 17.9% interest in Boreal, which owns the remaining 90.1% of BEMC.

First Cobalt Corp recently announced that it has commenced testing cobalt hydroxide material as feedstock for the First Cobalt Refinery. The First Cobalt Refinery is a hydrometallurgical cobalt refinery in the Canadian Cobalt Camp, approximately 500 kilometres from the US border. The Company released the results of three independent studies undertaken to estimate capital requirements, operating costs, permit renewal timelines, potential feedstock options and offtake opportunities. At a 24 tonne per day feed rate and using the current flowsheet, the capital cost of the restart is estimated at USD 25.7 Million (including a 30% contingency) and a permitting review concluded that a restart is possible within 18 months of selecting a feedstock. 

Trent Mell, President & Chief Executive Officer, commented: "Our objective is to enter into a long-term agreement for a reliable source of ethically-mined cobalt. The cash flow potential from restarting the refinery in as little as 18 months could allow us to fund a significant amount of work to advance our flagship Iron Creek Cobalt Project in Idaho, USA while also providing a much-needed North American source of cobalt. In parallel with these tests, management has commenced discussions with third party sources of capital that would minimize or eliminate any equity dilution associated with a restart of the First Cobalt Refinery."

PolyMet Mining Corp. reported earlier this year that it has filed an updated technical report with Canadian and U.S. securities agencies that reaffirms the economic and technical viability of the NorthMet copper-nickel-precious metals project located near Hoyt Lakes, Minnesota. The report provides technical and economic details for development of the mining operation in two distinct phases.

– Phase I involves development of 225 million tons – nearly one-third of NorthMet's known resource – into an operating mine processing 32,000 tons per day over a 20-year mine life. It also includes rehabilitating the former LTV Steel Mining Company processing plant.
– Phase II involves construction and operation of a hydrometallurgical plant to treat nickel sulfide concentrates into upgraded nickel-cobalt hydroxide and recover additional copper and platinum-group metals. While development of this phase will be at the company's discretion, both phases are currently being permitted and are included in the Final Environmental Impact Statement and draft permits. This phase would increase the project's capital costs by approximately USD 259 Million.

"This report reaffirms the technical and financial viability of the 32,000 tpd case for which the final EIS and draft permits have been issued. Our focus remains on obtaining final permits under the 32,000 tpd permit case, meeting our environmental and financial assurance obligations under the terms of those permits, and obtaining the necessary financing to build the project," noted Jon Cherry, President and Chief Executive Officer. "We are making significant progress on all of those fronts."

Taseko Mines Limited recently reported earnings from mining operations before depletion and amortization* of USD 33.7 Million and adjusted net income* of USD 1.5 Million for the three months ended September 30, 2018. Copper production in the third quarter was 43.0 million pounds (100% basis), which represents a 28% increase over the previous quarter as a result of the higher head grades and increased mill throughput. Total copper sales for the quarter were 29.0 million pounds (100% basis), as concentrate shipments were delayed by poor rail service between the mine and the port terminal. As a result, inventories increased to 18.5 million pounds of copper (100% basis) at September 30, 2018. The lower sales affected the Company's quarterly revenues by approximately USD 40 Million and cash flow by approximately USD 30 Million, based on current copper pricing. The excess inventory is expected to be sold in the fourth quarter. 

Russell Hallbauer, President & Chief Executive Officer commented, "In August, Gibraltar's mine engineering group determined that the Granite Pit high wall could be steepened, based on data from geotechnical and rock structure evaluations. We immediately redesigned the Granite Pit pushback, which allowed us earlier access to high grade ore benches. These benches, which we partially mined in the third quarter, were not included in the 2018 mine plan and ended up having a dramatic impact on copper production during the quarter."

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