PALM BEACH, Florida, July 11, 2018 /PRNewswire/ --
Marketnewsupdates.com Market Commentary
Cobalt is unrivalled among metals in the key battery metric of energy density. Without it, your smartphone battery can run out by lunchtime, and an electric vehicle (EV) would need a 4-hour recharge in the middle of a 100-mile ride from New York to Philadelphia. Industry players such as eCobalt Solutions Inc. (OTC: ECSIF) (TSX: ECS), First Cobalt Corp. (OTC:FTSSF) (TSX:FCC), Clean TeQ Holdings Limited (OTC:CTEQF) (TSX:CLQ) (ASX:CLQ), Fortune Minerals Limited (OTC:FTMDF) (TSX:FT) and Pacific Rim Cobalt Corp. (OTC:PCRCF) (CSE:BOLT) are exploring global solutions to an expected cobalt shortage.
Shortage Leaves Market Heavily Reliant on Congo Supply
The importance of cobalt in the lithium-ion battery has caught the mining industry off-guard. A sudden spike in demand for smartphones led manufacturers to the Democratic Republic of Congo (DRC), where cobalt-rich ore is often mined in precarious conditions and sometimes using children.
Cobalt prices surpassed a ten-year high of $90,000 per metric ton on the London Metal Exchange this year due to shortages, and the price has almost quadrupled since 2016. This has created a conundrum for major cobalt users including Apple Inc. Faced with greater scrutiny, Apple said it will buy material directly from mining companies to ensure it comes from sustainable sources.
A new generation of mining entrepreneurs are looking to convince the automobile and electronics industries that they can build a new and more sustainable supply chain. Other Top 10 producing countries still include areas of high geopolitical risk including Cuba, Madagascar and Russia, according to the U.S. Geological Survey.
One such company is Pacific Rim Cobalt (OTCQB:PCRCF) (CSE:BOLT) that has purchased five cobalt-nickel targets in Indonesia spanning 5,000 hectares. Previous drilling at the Cyclops project indicates a resource of 37 million tonnes of 0.11% cobalt and 1.31% nickel, see the historical estimates section below for more information. Pacific Rim Cobalt (OTCQB:PCRCF) (CSE:BOLT.CN) is currently drilling to further define the historic estimate this year and seeks an offtake agreement. Several areas of the Cyclops projects have yet to be explored, leaving the potential for further discoveries.
Pacific Rim is looking to join a market dominated by UK-listed Glencore, which produces 27,400 tons from mostly DRC mines, according to S&P Global Intelligence. Second and third ranked producers China Molybdenum and Fleurette Group also source ore from the DRC. Brazil's Vale comes fourth and Gecamines, a DRC-based commodity trading company, is ranked fifth.
Pacific Rim is currently looking for a new source of untapped cobalt, often found in nickel laterite deposits that are scattered among Pacific Rim islands such as Indonesia, Papua New Guinea and parts of Australia. Some of these resources were previously explored in the 1990s but never developed because the pre-smartphone value of cobalt was close to zero. Project economics could be highly favorable, as nickel will also benefit strongly from broader use of EV vehicles.
Industry peers are finding offtake partners that allow projects to be financed, a trend that could benefit Pacific Rim. Australian Mines Ltd. signed a long-term supply deal with SK Innovation Co., South Korea's top oil producer, for its Sconi nickel and cobalt mine project in Queensland state. Vale recently signed a $700 million deal in June to sell future cobalt output from its Voisey's Bay mine in Newfoundland.
"It appears that the raw material supply chain for the battery sector is becoming increasingly recognized as an opportunity with significant growth potential," said Ranjeet Sundher, Pacific Rim Cobalt's (OTCQB:PCRCF) (CSE:BOLT) President & CEO.
Smartphones Aside, Demand for Cobalt is Projected to Triple
The world currently ships 1.4 billion smartphones annually and that market is expected to grow 3% in 2019, according to consultants IDC. However, the bulk of future demand lies in EV battery usage. More than a dozen countries, including China, legislated for entire EV car adoption in a 2024-2025 timeframe last year, according to Ken Hoffman, a basic materials expert at McKinsey & Co.
The average EV contains 84 kilograms of copper, 30 kilograms of nickel and 8 kilograms of cobalt, according to Glencore. If EVs represent 30% of the global car fleet in 2030, that will require 314,000 tons a year of new supply of cobalt, more than triple what it is now, Glencore said.
Cobalt demand for EVs is expected to surge to 115,000 tons per year in 2025 from 55,000 tons a year in 2017, according to Darton Commodities. China is leading the demand for cobalt consumption and is on track to use over 8,000 tons per year alone by 2021 for EV assembly lines.
Even with lower proportions of cobalt in the modern battery mix, rising demand for large electrical storage solutions such as Tesla's Gigafactory in Nevada could boost cobalt usage. The metal remains an essential alloy ingredient for products like jet engines and medical devices.
The likes of Pacific Rim Cobalt (OTCQB:PCRCF) (CSE:BOLT) hope to ultimately offer a diverse and safer source of supply of cobalt than the DRC, especially as there is a drive from major global corporations to ensure that their supply chains are free of labor abuse. The Cyclops project is located close to the port of Jayapura on the island province of Papua and provides good future port access to Chinese markets.
Other Dominant Industry Players
CleanTeq (OTCQX:CTEQF) (TSX:CLQ) (ASX:CLQ) is developing the Clean TeQ Sunrise nickel-cobalt-scandium laterite project in New South Wales, Australia. The company also owns a proprietary hydrometallurgical process to treat ore at the facility that will be dedicated to the supply of battery metals. CleanTeq also owns a wastewater treatment business that recycles waters in power, mining and industrial applications. The company has signed an offtake agreement with Beijing Easpring last year, a five-year agreement for 20% of the company's cobalt and nickel sulphate production.
eCobalt Solutions Inc. (OTCQX:ECSIF) (TSX:ECS) has permitting in place to redevelop a former a cobalt mine in Idaho. The company is due to start production in 2019. The company has spent $120 million developing the project over the past 20 years. The Idaho Cobalt Project also contains copper and gold reserves. eCobalt has signed letters of intent with several potential offtake partners and is seeking to convert one or more of those into a long-term offtake agreement.
First Cobalt Corp. (OTCQX:FTSSF) (TSX:FCC) is developing three cobalt projects in both Canada and the US, including the 727-hectare Iron Creek project in Idaho which has 9,100 meters of historic drilling carried out by major mining company Noranda. Exploration concessions in Ontario total more than 10,000 hectares and include a former mill and permitted cobalt refinery in the historic Cobalt Camp. The project also contains 0.3% copper besides 0.59% cobalt grade average.
Fortune Minerals (OTCQX:FTMDF) (TSX:FT) is a company developing the NICO cobalt-gold-bismuth-copper mine and mill project in the Canadian Northwest Territories. The company discovered the deposit in 1996. Fortune Minerals also plans to build a refinery in Saskatchewan, Canada. NICO holds more than 10% of global bismuth reserves. The company also holds other mining assets in the Northwest Territories.
A New Generation of Mines
With artisanal miners in the DRC acting as a supplier of last resort, the mining industry needs to quickly develop a new generation of cobalt mines that will create a reliable supply chain for global manufacturers.
Electronics manufacturers such as Apple Inc., and carmakers are under growing pressure to ensure that their supply chains are free of materials sourced from underage or abused labor. The industry needs explorers with profiles like Pacific Rim Cobalt (OTCQB:PCRCF) (CSE:BOLT) working to identify cobalt sources that meet the environmental and social criteria of the 21[st] century.
Pacific Rim Cobalt considers the cobalt and nickel tonnage and grade estimates contained herein to be historical estimates. The historical estimates are contained in the Summary Geologic Investigations, PT. Pacific Nikkel Indonesia 1969 - 1979 (Reynolds 1979). These historical estimates do not use categories that conform to current CIM Definition Standards on Mineral Resources and Mineral Reserves as outlined in National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") and have not been redefined to conform to current CIM Definition Standards. These estimates were prepared in the 1980s prior to the adoption and implementation of NI 43-101. A qualified person has not done sufficient work to classify the historical estimates as current mineral resources and Pacific Rim Cobalt is not treating the historical estimates as current mineral resources. More work, including but not limited to, drilling, will be required to conform the estimates to current CIM Definition Standards. Investors are cautioned that the historical estimates do not mean or imply that economic deposits exist on the Company's project. Efforts to obtain any additional information regarding relevant historical work is ongoing, although there are no assurances that this original data will be found. Pacific Rim Cobalt believes that the historical estimates are relevant to continuing exploration on the project. For more information please refer to our technical report, filed on SEDAR on December 8, 2017 and available under the Company's profile at http://www.sedar.com.
DISCLAIMER: Microsmallcap.com (MSC) is the source of the Article and content set forth above. References to any issuer other than the profiled issuer are intended solely to identify industry participants and do not constitute an endorsement of any issuer and do not constitute a comparison to the profiled issuer. FN Media Group (FNM) is a third-party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. FNM is NOT affiliated with MSC or any company mentioned herein. The commentary, views and opinions expressed in this release by MSC are solely those of MSC and are not shared by and do not reflect in any manner the views or opinions of FNM. Readers of this Article and content agree that they cannot and will not seek to hold liable MSC and FNM for any investment decisions by their readers or subscribers. MSC and FNM and their respective affiliated companies are a news dissemination and financial marketing solutions provider and are NOT registered broker-dealers/analysts/investment advisers, hold no investment licenses and may NOT sell, offer to sell or offer to buy any security.
The Article and content related to the profiled company represent the personal and subjective views of the Author (MSC), and are subject to change at any time without notice. The information provided in the Article and the content has been obtained from sources which the Author believes to be reliable. However, the Author (MSC) has not independently verified or otherwise investigated all such information. None of the Author, MSC, FNM, or any of their respective affiliates, guarantee the accuracy or completeness of any such information. This Article and content are not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action; readers are strongly urged to speak with their own investment advisor and review all of the profiled issuer's filings made with the Securities and Exchange Commission before making any investment decisions and should understand the risks associated with an investment in the profiled issuer's securities, including, but not limited to, the complete loss of your investment. FNM was not compensated by any public company mentioned herein to disseminate this press release but was compensated forty four hundred dollars by MSC, a non-affiliated third party to distribute this release on behalf of Pacific Rim Cobalt
FNM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may", "future", "plan" or "planned", "will" or "should", "expected," "anticipates", "draft", "eventually" or "projected". You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company's annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and MSC and FNM undertake no obligation to update such statements.
FN Media Group, LLC