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Cobalt Shortages Ahead

September 2, 2023/in News /by cobaltic

Growth in electric vehicles and batteries is causing supply issues that could affect broad swaths of the electronics market.

BY: MARK LAPEDUS

Rapid growth of electric vehicles is creating an enormous demand for cobalt, causing tight supply, high prices and supply chain issues for this critical material.

Cobalt is a ferromagnetic metal and one of the key materials used in lithium-ion batteries for cell phones, notebook PCs, battery-electric cars and hybrids. It also is used in alloys and semiconductors. And while the IC industry consumes a tiny percentage of the world’s cobalt supply, that supply is tightening.

For cobalt, the big growth market is the electric car business, which requires tons of cobalt a year. In the supply chain, metals are mined and processed into cobalt. Refined cobalt is sold to lithium-ion battery makers, which then sells rechargeable batteries to electric car makers like BMW, Nissan, Tesla, Toyota and others. A smartphone contains 5 to 20 grams of cobalt, compared to 4,000 to 30,000 grams, or 9 to 66 pounds, of cobalt per vehicle, according to Fortune Minerals.

Cobalt provides high energy density and thermal stability in a battery. Lithium-ion batteries consist of an anode, cathode and other components. Graphite is used for the anode. In one example of the cathode, Tesla uses a nickel-cobalt-aluminum-oxide (NCA) chemistry. In simple terms, lithium ions move from the anode to the cathode and back, causing the battery to charge or discharge.

All battery materials have an assortment of supply chain issues, but cobalt is arguably the biggest concern. For some time, cobalt supply has been tight and prices have skyrocketed as a growing number of carmakers are introducing and shipping the next wave of electric vehicles. China, for one, is making a major push into the arena.

Today, there is just enough cobalt produced to meet demand for electric cars, but it might be a different story in the future. “Generally speaking, there should be enough refined supply to meet demand over the next few years if capacity expansions continue, as expected,” said Jack Bedder, an analyst at Roskill, a metals/minerals research firm. “After around 2022, we will need to see much more capacity expansion if supply is to meet demand.”

The problem is that some 67% of the world’s cobalt supply is mined in the Democratic Republic of the Congo (DRC), a politically unstable nation with questionable business practices. “Many end-users, namely car companies, will need a lot of cobalt, perhaps thousands of tons each year to make their products,” Bedder said. “Cobalt demand is increasing and there are concerns about the availability of future mine supply. There are real child labor issues in the DRC, and thus responsible end users want to procure ethically sourced material.”

All told, the issues with cobalt are worrisome, causing the industry to react on several fronts. Among them are:

A growing number of new cobalt mining projects are in the works, many of which are in nations outside the DRC.
The industry is currently shipping lithium-ion cells with less cobalt due to cost and supply-chain concerns, but there are some safety issues on the horizon.
Carmakers are forming new alliances with battery makers to secure a source of lithium-ion batteries, including cobalt. Last year, Panasonic, the battery supplier for Tesla, formed a battery partnership with Toyota. Recently, Volkswagen committed $25 billion in battery orders from three vendors—LG, Samsung and CATL. And not long ago, BMW signed a $4.7 billion battery deal with CATL.

Cobalt supply issues
There are a number of other alliances as well, meaning the electric car industry will require more cobalt to meet future demand. That’s even true if the amount of cobalt is reduced in the battery.

Fig. 1: EV Sales and Cobalt Demand Forecast Source: Cobalt27

In total, electric vehicles, including battery-electric cars and hybrids, represent about 1% of the world’s cars sold today. But driven by China and others, the electric vehicle market is projected to grow from 1.2 million units in 2017, to 1.6 million in 2018, to 2 million in 2019, according to Frost & Sullivan.

“Electric vehicles are taking off. Today, we are on track for 100 million passenger vehicles by 2020. That number is growing at around 3%,” said Mike Rosa, director of strategy and technical marketing for Applied Materials. “Of that number, there will be maybe 5 million that will be electric. That’s growing at about 4.6%.”

By 2025, the electric car market is expected to reach 25 million units, according to Frost & Sullivan. Other projections aren’t so rosy, as Cobalt27 projects 15 million units by then.

Regardless, the industry faces some challenges, which could hamper the growth rates. Battery technology and the charging infrastructure are among the challenges. Energy density, the amount of energy the battery can store, is one of the issues.

“The energy density of the Li-ion battery has nearly quadrupled in its 27 years of existence on the market through evolutionary improvements in materials and design,” said Philippe Vereecken, principal scientist and program manager at Imec. “The energy density of Li-ion batteries can currently provide a limited driving range of 400-500 km, whereas the consumer wants a driving range of 700 km or more. Also, the high cost of Li-ion batteries makes the electric car quite expensive.”

There are other issues. “In general, one of the challenges is that traditional lithium-ion is reaching its practical limits,” said Erik Terjesen, senior director of licensing and strategy at Ionic Materials, a startup that is developing a polymer electrolyte material for solid-state batteries.

“And as EVs are becoming more mainstream, there are increasing concerns about safety,” Terjesen said. “It’s well known that lithium-ion does contain flammable liquid electrolytes today. The automakers, in particular, realize the volume of batteries that they are going to consume. Given the fact that these cars are going to be on the road, they are thinking about safety.”

Safety is a concern in other respects. “We have high-end cars that have a lot of attributes, but one of the main things is safety,” said Rich Rice, senior vice president of business development at ASE, at a recent event. “We have electric cars and hybrids that have a lot of new requirements with extended temperature ranges and power delivery.”

While OEMs face an assortment of technical challenges, there are also supply chain issues behind the scenes, namely with cobalt. Cobalt itself resides in the Earth’s crust and ocean floor, but it isn’t mined in its pure form.

“Cobalt is a by-product of both copper and nickel. Not every copper deposit contains cobalt and not every nickel deposit contains cobalt,” explained Robin Goad, president and chief executive of Canada’s Fortune Minerals, a development stage mining company. Fortune is developing a cobalt-gold-bismuth-copper mining and refinery project in Canada.

“The primary by-product of copper production comes from a unique style of material deposits that are found in the east African copper belt. This goes up from Zambia through the Congo and up into Uganda,” Goad said.

Nickel deposits are found in Australia, Cuba, Canada and other nations. “Most nickel nickel sulfide and laterite deposits do contain cobalt as a by-product,” he said.

Generally, copper and nickel mining are capital-intensive businesses. Mining these metals and then refining them into cobalt isn’t new, but it’s a complex process with various challenges.

The supply chain is also problematic. DRC is the world’s largest cobalt producer, and the DRC government recently increased the royalties on mined products, such as copper, cobalt and gold, from 2% to 3.5%, according to Roskill. The royalties on cobalt could hit 10%. Some mining companies are exempt from the royalties for 10 years, however.

It’s unclear how this will impact pricing. Generally, cobalt prices have surged amid booming demand. Prices hovered around $13 per pound between 2012 and 2016, according to Roskill. But prices jumped to $32 per pound last year and were more than $42 per pound in early 2018, according to the firm.

The supply/demand picture is also a worrisome issue for OEMs. Today, several DRC-based cobalt mining projects are ramping up or have restarted to meet demand. The two most notable examples are mines operated by the Eurasian Resources Group and Katanga Mining. Glencore, the world’s largest cobalt mining company, has a major stake in Katanga.

In 2017, the worldwide supply of refined cobalt production reached 114,700 tons, while demand was at 117,700 tons, according to Roskill. “The market is broadly in balance,” Roskill’s Bedder said. “Again, we forecast that there will be sufficient levels of cobalt mine supply until around 2022, but thereafter we will need to see substantial increases.”

Here’s another way to look at the picture: In 2017, electric vehicles consumed about 9% of the world’s production of cobalt, 15.6% of lithium, 1.3% of nickel and less than 1% of manganese, according to the U.S. Department of Energy (DOE). The DOE projects that lithium-ion batteries “will dominate the total cobalt and lithium markets in a few years.”

To meet cobalt demand, the mining industry is developing a number of new projects. In fact, there are roughly 185 cobalt mining projects on the drawing board, according to Roskill. But many projects are still in the development phase, and may not move into production anytime soon.

“These are mines that could theoretically enter production. Most are at very early stages. Lots of projects are taking advantage of the recent hype around cobalt and EVs,” Roskill’s Bedder said. “For now, it’s important to focus on the more developed projects, while keeping an eye on the various early-stage projects to see how they progress.”

Meanwhile, once the metals are mined and processed, cobalt is refined. The materials are shipped to refining companies, many of which are in China. In fact, China controls 60% of the world’s cobalt refinery business.

All told, OEMs face several challenges. Procuring cobalt is a complicated process with several twists and turns. “You have complex supply chains. These are quite complex issues,” said Michèle Brülhart, director of innovations for the Responsible Business Alliance (RBA), a non-profit group that focuses on global electronics supply chain issues. The RBA has more than 125 members in the automotive, fab equipment, retail and semiconductor sectors.

“The risks that are being reported on or raised in the materials supply chain are concentrated at the very end of the supply chain, mostly what we call the upstream. This is where the materials are extracted, where the first processing takes place, and where they are exported and find their way into the international value chain,” Brülhart said.

The RBA spearheads several programs, including the Responsible Minerals Initiative (RMI), which addresses issues related to the responsible sourcing of minerals.

To help navigate the supply chain and develop best practices, RMI recently released the Risk Readiness Assessment Platform (RRA), a self-assessment tool that addresses risk management practices across 31 issue areas. It also lists downstream and upstream companies involved in tin, tungsten, tantalum, gold and cobalt. Tantalum, tin, tungsten and gold are considered conflict minerals, which by definition are extracted in conflict zones.

RMI also recently launched the Cobalt Reporting Template (CRT). “This is essentially a mapping tool. It allows companies to identify what we call choke points in the supply chain,” Brülhart said.

Battery trends
Once cobalt is refined, it is shipped to battery makers. For electric vehicles, the largest lithium-ion battery makers include companies such as BYD, CATL, LG, Panasonic, Samsung, SK and Tesla.

In total, there are 41 lithium-ion battery mega-factories in production or under construction worldwide, according to Fortune Minerals. Each plant requires tons of cobalt. For example, CATL is building a new facility that requires up to 23,000 tons of cobalt per year, analysts said.

Generally, there are several types of lithium-ion batteries. For example, batteries which are based on a lithium-cobalt-oxide (LCO) cathode chemistry are used in cellular phones and notebooks. Electric vehicle makers are using different types of lithium-ion cathode technologies, namely nickel-manganese-cobalt-oxide (NMC) and nickel-cobalt-aluminum-oxide (NCA). Tesla is in the NCA camp, while others use NMC.

The first round of NMC batteries contain equal concentrations of nickel, cobalt and manganese, which is referred to as NMC111. At one time, NCA batteries had a similar ratio.

In an NMC111 cell, the cathode material represents 40% of the cost of the battery, according to Benchmark Mineral Intelligence, a research firm. “So, there is an initiative to reduce the amount of cobalt contained in the batteries because of cost and supply chain concerns,” Fortune Minerals’ Goad said.

So NMC battery makers are now developing and shipping products with less cobalt. In these batteries, the nickel, cobalt and manganese content come in ratios of either 5:2:3 or 6:2:2. Most call it NMC532 (5 parts nickel, 3 parts manganese and 2 parts cobalt).

Generally, this reduces the cobalt by 20%, according to Benchmark, but it also increases the nickel content. Nickel helps to boost the energy densities in batteries.

This, in turn, impacts lithium-ion battery costs. “The cost is coming down because of the economies of scale. But more importantly, the batteries are delivering more power with less material. So you are getting more efficient batteries,” Goad said.

The industry is taking this a step further. Now it’s developing batteries with a cathode chemistry ratio of 8:1:1. Due out in 2019, the 8:1:1 batteries reduce the cobalt content and the associated costs. But the 8:1:1 batteries also face some challenges. As you move to a lower cobalt cell, the volatility increases and the probability of a flammable event is greater.

“The energy density is superior with greater nickel concentrations. But you do so at the expense of safety and there are some charging issues. The performance is impacted with lower cobalt,” Goad said. “You cannot eliminate cobalt below 5% or the structure of the lithium-ion battery breaks down. All of the major battery manufacturers will tell you that cobalt is going to be part of the chemistry for batteries at least for the next decade, if not two decades.”

Even with a lower cobalt content in batteries, the market will still require about 240,000 tons of cobalt per year by 2025, according to Exane BNP Paribas.

What’s next?
Regardless, the battery still remains the stumbling block for electric vehicles. They lack enough range to satisfy many consumers, particularly outside of urban areas.

This is the challenge being addressed by next-generation battery technologies. Some have little or no cobalt content, such as lithium-manganese-nickel-oxide (LMNO). Also in R&D are solid-state batteries.

A battery consists of an anode, cathode, electrolytes and a separator. The electrolytes are liquids that transport the ions from the anode to the cathode through a separator. “The separator keeps the anode and cathode from touching each other. It they touch each other, there is a short,” Ionic Materials’ Terjesen said.

Solid-state batteries replace the liquid electrolyte and separator with a solid material. This technology “will compact the materials in the cell and increase the cell voltage, both leading to an increase in the energy density,” Imec’s Vereecken said.

There are several efforts in the solid-state battery arena. Ionics, for example, has developed a polymer material that replaces the liquid electrolyte in the battery. A battery maker would still require an anode and cathode, both based on various chemistries.

Imec, meanwhile, is developing a solid nanocomposite electrolyte. These technologies are promising, but they are not expected to appear until 2025.

Until then, the industry will continue to use traditional batteries. Battery makers will also reduce the use of cobalt. Even so, cobalt will continue to haunt the supply chain, at least for the foreseeable future.

Cobalt Offers Rare-Earth Alternative

August 16, 2023/in News /by cobaltic

A rare-earth-free permanent magnet with properties approaching those of neodymium-based formulations has been created by researchers in France. Speaking at the 9th Joint European Magnetic Symposia (JEMS2018) last week, Lise-Marie Lacroix of the Laboratoire de Physique et Chimie des Nano-objets (LPCNO) in Toulouse described her group’s efforts to sidestep the need for rare-earth elements by using cobalt nanorods instead. Guillaume Viau, also at LPCNO, led the research.

Guillaume Viau’s group at the Laboratoire de Physique et Chimie des Nano-objets. Courtesy: Lise-Marie Lacroix

Small yet mighty

Rare-earth magnets are the strongest permanent magnets yet created and are favoured wherever a strong field is needed in a compact package. Since their discovery in the 1960s, these magnets have become indispensable components of the lightweight motors used in computer hard-disks, power tools and electric vehicles.

Although the rare-earth elements might not be as scarce as their name suggests, they are distributed unequally across the globe, and China has come to dominate production. Combine this fact with the diverse applications for which these magnets are vital, and it’s not hard to see why both Europe and the US have instituted programmes to develop alternatives.

Structural control

The key structural characteristic that explains rare-earth magnets’ exceptional strength is their microscopic anisotropy. The long, narrow crystals that comprise these materials show a pronounced directional dependence in their magnetic properties. It is the common alignment of these crystals during fabrication that produces the strong field of the bulk magnet. The resilience of the arrangement results in the material’s high coercivity.

To replicate this structure, Lacroix, Viau and colleagues first reduced a precursor cobalt compound via the polyol process—a well-known and commonly used way of producing metallic nanoparticles. “The basic idea we start from is as simple as building a new object with Lego. In our case, the individual building blocks are cobalt nanorods that we prepare by chemistry. We are now capable of producing a few grams of these rods in one batch,” Lacroix told physicsworld.com.

To form a macroscopic magnet from the suspension of nanorods, Viau’s group—working with Oliver Gutfleisch of TU Darmstadt, Germany—aligned the particles in an external magnetic field and subjected them to high pressure. Heating during compaction was found to affect the performance of the resulting magnet, so the group used a cold compression method. The researchers opted not to use a binder so that the magnetic volume fraction could be kept as high as possible. Van der Waals forces between the particles were sufficient to produce a bulk material with appropriate mechanical properties.

Ideal ratio

Since nanorods with the highest possible aspect ratio would yield the greatest structural anisotropy, one might expect that the longest, thinnest particles would produce the most effective magnets. Although coercivity did increase with aspect ratio, at ratios above 12 the trend ceased and even reversed. Viau’s team deduced that the greater number of defects in the longest crystals offer more initiation points for domain reversal, and therefore limit coercivity values.

The optimal magnetic properties were found to be exhibited by nanorods around 10 nm across and 70 nm long, which the researchers achieved by varying the type and concentration of the nucleating agent: more nucleation sites mean that fewer cobalt atoms are available per nanoparticle, limiting crystal growth.

The nanorods’ length and thickness are not the whole story, however. The group also discovered that magnetic domains can be flipped by electric charges at the tips of the cobalt particles, with the resulting domain boundaries propagating down the length of the nanorod. Making the particles ellipsoidal and “tipless” would solve the problem, but such morphologies are not obtainable by chemical synthesis. The researchers found a compromise by tuning the surfactant concentration to produce particles as uniformly cylindrical as possible.

Limited application

Reproducing the structure of rare-earth magnets in this way might reduce reliance on Chinese production to some extent, but using cobalt alone cannot be the complete solution. Demand for this element is rising due to its use in batteries, and its extraction process is a cause of ethical and environmental concern. This means that strong permanent magnets based on cobalt nanorods are most suited to small-scale applications in microelectronics, and will not replace rare-earth magnets in large engineering projects like wind turbines and maglev systems.

Data storage prospects broaden for antiferromagnetics

But though cobalt itself represents an imperfect replacement, the work demonstrates a powerful new technique. “This result is to our knowledge the first proof of concept of the potentiality of the bottom-up approach for the fabrication of hard magnetic materials,” says Lacroix. “There is still a lot of exploring needed to optimize the material, but it is really exciting to know that this fairly simple idea of playing Lego with nanoparticles comes to reality.”

Now the researchers are turning their attention to other alternatives, focusing first on iron-based nanoparticles. More common and environmentally benign than cobalt, iron presents a new set of challenges. Whereas cobalt nanoparticles grow preferentially along a single crystal axis, iron is naturally much more isotropic. This means that the structural anisotropy required to match the performance of rare-earths is much harder to realise in aggregates of iron nanoparticles.

Lacroix explains: “I’m not sure if we could totally replace rare-earth-based magnets with iron-based materials. One problem will come from the reduced coercivity that one can except from iron nanorods. For some uses this will be too small, but for specific applications it could be a good alternative.”

Marric Stephens was a materials-science editor at Physics World in 2017. He works in the journals department at IOP Publishing

China Set to Claim Cobalt Supply as Electric Vehicle Demand Picks Up

July 28, 2023/in News /by cobaltic

China looks set to dominate in cobalt as the metal is increasingly in demand for electric vehicles.

The price of cobalt has increased strongly in recent years. The metal has a 52-week high of $43.32 per pound and on 20 August 2023 was sitting at around $29.14. Despite fluctuations in price, overall cobalt’s value is rising strongly; one pound was worth just $20 in early 2011.

Companies are hunting opportunities in the cobalt industry due to the rising price and consumption of the metal. Cobalt is a key component in the lithium-ion batteries that power electronic devices such as laptops, PCs, smartphones and electric cars. Darton Commodities Limited Total estimates that cobalt demand will exceed 120,000 tons per annum by 2020, up approximately 30% from the 93,950 tons consumed in 2016.

China looks to lock down cobalt supply

MarketLine data highlights that the global hybrid and electric vehicle market grew by 33.2% in 2017 to reach a value of $105.6bn and market consumption volume grew by 33.5% the same year to reach a volume of 3.7 million units. The demand for electric vehicles is set to soar throughout the 2020s and shortages of cobalt could occur as early as 2022, which will likely send prices through the roof.

China already has a significant grip on the world’s cobalt supply, but it could get tighter. In March 2018, China reached an agreement with Glencore, the largest producer of cobalt, to sell 52,800 tons of cobalt hydroxide (around a third of its production) to Chinese chemicals firm GEM over three years.

China’s lack of concern for the implications of cobalt mining in the DRC has placed them in an advantageous position. If African leaders advance Chinese influence then China is typically more than happy to leave them alone, compared to western aid which usually comes with political and economic conditions.

Growing concern over cobalt’s supply chain

More than 60% of the world’s cobalt is currently mined in the Democratic Republic of Congo (DRC). The DRC presents ethical challenges for suppliers given its instability. A campaign carried out by Amnesty International found that around 40,000 children, some as young as four years old, are working as artisan miners in the country. With many companies keen to avoid any ethical concerns in regard to their supply chains, this further limits access to cobalt reserves.

Manufacturers are anticipating a supply crisis in cobalt, and are attempting to develop alternative means of battery production, such as solid-state batteries. However, the technology is still years away, and major manufacturers such as Panasonic, which supplies Tesla, are committed to conventional lithium-ion batteries until at least 2025. Fundamentally cobalt is still one of the most important determinants, and engineering the problem away is not yet possible.

Electric Cars Charge Up Cobalt – WSJ

March 4, 2023/in News /by cobaltic

By David George-Cosh Published January 03, 2023 Features Dow Jones Newswires – A handful of Canadian miners are ramping up operations to mine cobalt, betting on demand for a socially responsible source of the metal that is in high demand as a key component of electric cars.

Most cobalt currently comes from the Democratic Republic of Congo, where supply is threatened by political, legal and labor issues. That means car makers and battery suppliers are increasingly looking elsewhere for the mineral.

Miners in Canada such as Vale SA, which has a cobalt-producing mine in Sudbury, Ontario, Sherritt International Corp., and smaller firms such as Royal Nickel Corp., First Cobalt Corp. and Fortune Minerals Ltd. are raising funds and engaging in exploratory drilling. Mainly through operations led by Vale, Canada is the world’s third-biggest producer of cobalt, after the Congo and China, accounting for about 6% of the world’s supply, according to the U.S. Geological Survey.

The metal is a crucial component of lithium-ion batteries, which are used to power electric vehicles as well as portable electronic devices due to its ability to conduct electricity when stacked with other metals such as lithium and nickel.

The demand for socially responsible sources of cobalt comes as the price of the metal has soared to $75,000 a metric ton on the London Metal Exchange, more than double the price from the start of 2017.

BMO Capital Markets expects current cobalt prices to double in the next two years as demand for electric-vehicle batteries continues to outstrip existing supply of the metal, the bank said in a report released in December.

The Congo produces roughly two-thirds of the world’s cobalt, or about 66,000 metric tons a year, but mines there have been criticized over reports of child labor and unsafe conditions.

Amnesty International released a report in 2016 that found thousands of children, some as young as 7 years old, and adults, mine cobalt in the country and work in perilous conditions without basic protective equipment. The organization was able to trace the sale of that cobalt to Chinese refiners, which then resold the mineral to battery component manufacturers.

In addition, a major mine there that is jointly owned by state mining firm Gécamines, and Belgian-based Groupe Forrest International SA, has been caught up in a labor-contract dispute. And an analysis by the Carter Center, a human-rights nonprofit, found nearly $750 million in royalties, bonuses and proceeds from asset sales that are estimated to go to the Congolese government are missing from Gécamines’s accounts. Gécamines has disputed the report and declined to comment.

Volkswagen AG and nine other leading car makers, including Ford Motor Co. and Daimler AG, whose supply chains include cobalt buyers, in November set up a “raw materials observatory” that aims to address ethical and labor-rights issues in sourcing raw materials, including cobalt.

A Volkswagen spokesman said the company remains in “intensive discussions” with its suppliers to determine how to improve the sustainability of its supply chain, especially for raw materials used in electric vehicles.

Electrovaya Inc., a battery maker based in Toronto, is in discussions with Canadian cobalt miners, including Fortune, to lock down supply contracts for the coming years, said Chief Executive Sankar Das Gupta. “All our customers want ethical sourcing,” Mr. Gupta said.

A Fortune spokesman said the company has signed numerous confidentiality agreements with partners they are in discussions with, and declined to provide further comment on Electrovaya.

For Robin Goad, chief executive of Fortune, which is developing a mine in Canada’s Northwest Territories, that may be an opportunity.

Mr. Goad said that early next year he plans to announce project financing for the mine, which is expected to produce 2,000 metric tons of cobalt annually, as well as a refinery it plans to build in Saskatchewan estimated at a total cost of 650 million Canadian dollars ($516 million). He declined to give further details about the financing.

“You can draw a straight line from our mine in the Northwest Territories to the refinery in Saskatchewan and know that is being produced here,” Mr. Goad said. “When you get [refined] cobalt from China, you don’t know where it’s being sourced from.”

Miners outside of Canada are looking to cash in on demand for cobalt. Toronto-based Sherritt International has nickel-cobalt mines in Cuba and Madagascar that produce about 7,000 metric tons of cobalt, roughly 6% of the world’s total production.

“Market dynamics are right now in our favor with respect to cobalt,” said David Pathe, Sherritt’s chief executive, adding that the company is in a good position to source cobalt from mines free of conflict and labor violations.

First Cobalt sees potential in abandoned open-pit silver mines just outside Cobalt, Ontario, which is located approximately 300 miles north of Toronto and is named for its historic links with the metal. More than 50 million pounds of cobalt and 600 million ounces of silver were mined in the region before miners abandoned the area shortly following the World War II after exhausting the region’s silver mines.

Now, there is enough pink-hued oxidized cobalt shown in discarded rock piles in the 25,000 acres of land claimed by First Cobalt to conduct exploration drilling, said Trent Mell, president and chief executive of First Cobalt. Initial drilling activity shows enough potential for a high-grade cobalt-silver vein system in some mines, he said.

“Next year, we gotta drill the hell out of this thing,” Mr. Mell said.

This article was republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 3, 2018). Write to David George-Cosh at david.george-cosh@wsj.com

Electric Cars Put Battery Metal Prices in Fast Lane

January 2, 2023/in News /by cobaltic

Marcus Leroux, The Times – The metals needed to power electric vehicles were in hot demand in 2022, but a leading observer of the market believes that prices are still only in the foothills of the peaks they may yet achieve.

Demand for lithium, cobalt and nickel for batteries surged on the back of rising expectations about the move towards electric vehicles and the adoption and viability of large-scale energy storage. The prices of lithium and cobalt have more than doubled in the past year.

Andrew Miller, an analyst at Benchmark Minerals, which collects price data for the lithium-ion battery supply chain, said: “There is a big trend in the energy storage market and we’re now starting to see the beginnings of these big megafactories we’ve talked about.”

Tesla, the electric vehicle manufacturer, is building the best-known battery facility, its so-called gigafactory in Nevada. However, Benchmark calculates that there are 26 such factories under construction, although it will be several years before there is enough production of the commodities needed to make batteries to meet demand.

Peter Secker, chief executive of Bacanora Minerals, which is constructing a lithium mine in Mexico that is due to come into production in 2019, said: “It’s scary. The numbers are changing almost every day. Contract prices for lithium carbonate are at $13,000 a tonne, but spot prices far, far higher. The market is really tight.”

In September Great Wall Motors, a Chinese vehicle manufacturer, tried to secure a supply of lithium by buying a 3.5 per cent stake in Pilbara Minerals. Hanwa, a big trader of battery materials, has a 9 per cent stake in Bacanora. Despite being quoted on London’s junior market, Bacanora’s shareholder is dominated by big investors such as Blackrock, Capital Group and M&G, signalling the interest in lithium.

Glencore has been loudest among the big mining groups in talking up the prospects of battery technology for the commodities it produces. Its big copper mines in the Democratic Republic of Congo and Zambia have the added benefit of producing cobalt as a byproduct, unlike operations in Chile and Peru.

Glencore recently cited data from CRU, a consultancy, suggesting that the growth in electric vehicles and the consequent increase in grid infrastructure and charging kit would require additional copper equivalent to 18 per cent of global supply and a fourfold increase in the amount of cobalt.

Mr Miller warned that a lithium supply crunch was looming. “There’s no question of there not being enough of this stuff out there, but it’s whether it will come in the time period that Volkswagen or BMW want it to,” he said.

Published by The Times – View Article Here.

Cobalt Trends 2022: Prices Spike as Supply Concerns Grow

December 28, 2022/in News /by cobaltic

What happened in the cobalt market in 2022? Here’s a look at the major cobalt trends in 2017, from responsible sourcing to electric vehicle demand.
It has been a bright year for cobalt, a key metal in the lithium-ion batteries used to power electric vehicles (EVs). Carmakers and governments shifting toward electric cars, as well as increasing supply worries, have made news headlines throughout the year. As 2017 comes to a close, the Investing News Network is looking back at the main trends in the space this year, from rising EV demand to surging prices to responsible sourcing.

Read on to learn what happened in the cobalt market in 2017, including supply and demand dynamics and what market participants had to say during each quarter of the year.

Cobalt trends Q1: EV demand outlook boosts prices
At the beginning of the year, cobalt prices received a boost from increasing demand for electric cars, primarily from China. In Q1, consultants at CRU Group said electric car and plug-in hybrid vehicle sales could hit 4.4 million in 2021 and more than 6 million by 2025, up from 1.1 million last year.

As demand for electric cars increase, the need for cobalt is also expected to soar, as the metal is a key component in EV batteries. In total, surging demand for electric vehicles is expected to push demand for lithium-ion batteries above 400 GWh by 2025, Benchmark Mineral Intelligence says. Lithium-ion batteries contain about 11 kilograms of cobalt each.

“[W]e forecast battery demand for cobalt to go from 46,000 tonnes in 2016 to 76,000 tonnes by the end of 2020 and from a cobalt producers perspective supply needs to keep up with, or be close to, expanded demand,” Benchmark Mineral Intelligence analyst Caspar Rawles said in February.

In terms of supply, the major news of the quarter came from top cobalt producer Glencore (LSE:GLEN), which upped its involvement in the market. The Swiss giant paid $960 million to increase its stakes in two copper-cobalt operations in the Democratic Republic of Congo (DRC), Mutanda Mining and Katanga Mining (TSX:KAT). The latter is expected to become the world’s largest cobalt producer when it restarts production at some point next year.

But while the move was a good one for Glencore, analysts don’t expect it to help fill demand for cobalt. “Glencore already had a controlling interest in both of these projects prior to the deal and I don’t forecast any increase in supply that isn’t already anticipated in the market,” Rawles explained at the time.

Also at the start of the year, Tesla (NASDAQ:TSLA) announced plans to open two to three EV gigafactories by the end of 2017, further spurring excitement among cobalt investors. Elon Musk’s company started production at its Nevada facility in January, and by 2018 the gigafactory is expected to produce 35 GWh per year of lithium-ion battery cells.

During the first quarter of 2017, LME cobalt prices jumped more than 68 percent, trading between $32,500 and $54,750 per tonne.

Cobalt trends Q2: Gigafactories increase supply worries
During the second quarter of the year, LME cobalt prices, as well as prices for cobalt sulfate, the most common base chemical used as a cathode material in batteries, continued to increase.

Chart via Benchmark Mineral Intelligence.

In Q2, the electric car story gained momentum, with analysts at UBS (NYSE:UBS) raising their forecast for global sales of EVs in 2021 to 3.1 million from 2.5 million, and to 14.2 million in 2025.

“Demand is remarkably strong,” Eurasian Resources Group CEO Benedikt Sobotka said in June. He added that “[p]eople [were] inquiring about lifetime offtake contracts” for the company’s $1-billion Metalkol Roan tailings reclamation project in the DRC. The project is expected to produce 14,000 tons a year.

In terms of supply, concerns continued to increase during the second quarter of the year. “In the next few years only five new cobalt mines are due to come online and will add about 50,000 tons of cobalt per year. That is certainly not enough to support the demand in the market,” Stephan Bogner of Rockstone Research said at the time.

Concerns about existing cobalt supply also started to increase. That’s largely because the politically unstable DRC is the world’s top cobalt producer, accounting for more than 50 percent of cobalt output; mining there is also linked to child labor.

In an April interview, Rawles explained that while there are some cobalt projects in more stable jurisdictions that may ultimately add to supply, it will not be possible to eliminate DRC cobalt. “There’s no lithium-ion industry without DRC cobalt,” he emphasized. That said, he also mentioned that even with DRC cobalt the market is headed for a deficit.

Major news impacting the market during the quarter came from Tesla’s Musk, who hinted at “probably four” more gigafactories to be announced later in 2017. At the end of June, Tesla also announced that battery production for its upcoming Model 3 was underway.

LME cobalt was up 7 percent during the second quarter, trading between $51,500 and $59,500.

Cobalt trends Q3: Governments and carmakers shift to EVs
At the beginning of the second half of the year, announcements from major governments hit the cobalt market. France, the UK and potentially China outlined plans to ban all fossil fuel cars by 2040. Other countries have also set electric car sales targets or have hinted at bans on ICE cars in the coming years; those countries include Norway, Germany and the Netherlands.

In addition, several carmakers said they will electrify most of their models by mid-2020s, including Volvo (STO:VOLV), BMW (ETR:BMW), GM (NYSE:GM), Mercedes, Dyson and Ford (NYSE:F), among others.

Even so, China continued to lead the EV space, with the government pushing for all-electric battery cars and plug-in hybrids to account for at least one-fifth of its vehicle sales by 2025. Partnerships between major carmakers and local firms were another major trend during the quarter, with Renault-Nissan(EPA:RNO) and Ford fighting for a place in the surging EV market.

In the third quarter, sales of electric vehicle and plug-in hybrid batteries exceeded 287,000 units, up 63 percent compared to the same period last year on the back of strong Chinese demand. That number is expected to increase significantly as the electric car revolution continues to unfold.

As a result, carmakers and battery companies started to look for ways to secure the materials needed to make lithium-ion batteries, in particular cobalt. In July, mining giant Glencore signed a large cobalt deal with Chinese producer Contemporary Amperex Technology that could help Volkswagen (FWB:VOW) secure batteries for its electric cars.

Later in the quarter, Volkswagen announced it was seeking to invest $60 billion in electric car content, including batteries, and was looking to sign cobalt supply deals by the end of the year.

LME cobalt remained neutral during the third quarter, trading between $50,000 and $62,000.

Cobalt trends Q4: All eyes on long-term supply security and responsible sourcing
In Q4, carmakers and battery companies continued to try to secure long-term cobalt supply. In November, China’s Contemporary Amperex Technology outlined plans for a $2-billion IPO to boost its lithium-ion battery production, and announced it was looking to invest in upstream companies.

In Q4, carmakers and battery companies continued to try to secure long-term cobalt supply. In November, China’s Contemporary Amperex Technology outlined plans for a $2-billion IPO to boost its lithium-ion battery production, and announced it was looking to invest in upstream companies.

Later in the month, Volkswagen was said to be discussing supply contracts with top cobalt producers, including Glencore, but the talks ultimately ended without success.

“We have requested different options for a hedge from the raw materials industry in the context of a tender … We have already had constructive talks with the well-known suppliers and will continue those (discussions),” a Volkswagen spokesperson recently confirmed. “Besides supplies and costs, other topics in discussion include future capacity expansion, sustainability and transparency.”

Indeed, transparency and responsible sourcing have been one of the main cobalt trends surrounding the market in the past few weeks. In November, Amnesty International released a report warning that electric car companies are “not doing enough” to tackle human right abuses in their cobalt supply chains. Among carmakers, the report shows that BMW has made the most improvements, while Renault and Daimler (ETR:DAI) “performed particularly badly.”

After the study was published, the LME launched an investigation over concerns that cobalt traded on its exchange could be linked to child labor. In addition, a group of 10 carmakers announced that it will set up a Raw Materials Observatory to assess the risks posed in the auto sector by crucial materials like cobalt.

“Over time we will see a division in the market between those companies that will be able to demonstrate they are following responsible sourcing practises and those that are not, and that will have an impact on market demand from those companies,” RCS Global director Harrison Mitchell said earlier this year, explaining what the consequences will be for those who decide not to follow ethical and responsible practises in the cobalt industry.

“Producers will need to wake up to the fact that they will need to demonstrate that they are sourcing in a responsible way [and not just say that they are],” he also noted.

During the last quarter of the year, cobalt prices continued to increase, and the forecast for next year remains very optimistic. LME cobalt has been trading between $59,000 and $68,000. For investors interested in learning more about what’s ahead for cobalt, keep an eye out for our upcoming cobalt outlook with commentary for analysts and companies.

Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

NextView to Acquire Lithium-X for Over $245 Million

December 19, 2022/in News /by cobaltic

VANCOUVER – Lithium X Energy Corp. (“Lithium X” or the “Company”) (TSXV: LIX) (OTC: LIXXF) and Nextview New Energy Lion Hong Kong Limited (“NextView”) are pleased to announce that they have entered into a definitive agreement (the “Arrangement Agreement”), pursuant to which NextView has agreed to acquire all of the issued and outstanding common shares and warrants of Lithium X (the “Arrangement”). Lithium X’s flagship project, Sal de los Angeles lithium brine project, as well as Arizaro Lithium Brine Project are located in the prolific “Lithium Triangle” in mining friendly Salta province, Argentina.

Transaction Highlights:

Cash offer of $2.61 per share
Directors and officers of Lithium X holding approximately 6% of the outstanding Lithium X shares have entered into voting agreements to support the transaction

Under the terms of the Arrangement Agreement, each common share of Lithium X will be purchased by NextView at a price of $2.61 per share (the “Share Consideration”), and each warrant of Lithium X will be purchased by NextView at a price of $0.01 per warrant (the “Warrant Consideration”). The consideration to be received by the Lithium X shareholders pursuant to the Arrangement represents a premium of 29.4% to the 20-day volume-weighted average trading price of the Lithium X shares on the TSX Venture Exchange ending on December 15, 2017 and a 22.5% premium to the closing price of the Lithium X shares on the TSX Venture Exchange on December 15, 2017. The Warrant Consideration is nominal, reflecting the fact that the value of the warrants is being crystalized at an amount less than their $2.75 strike price. On completion of the Arrangement, all options to purchase Lithium X shares that have not been exercised will be automatically terminated under the terms of Lithium X’s option plan. All restricted share units will be redeemed for a cash amount per RSU equal to the Share Consideration.

Benefits to Lithium X shareholders

Provides immediate liquidity to common shareholders in the form of $2.61 per share
Represents premium to shareholders of 29.4% based on the 20-day VWAP ending on December 15, 2017
Removes future financing, dilution, commodity, construction, execution and country risk
Transaction represents a premium of 37.4% over the highest price at which Lithium X has completed a financing ($1.90) since becoming a lithium explorer and developer

Lithium X Chairman, Paul Matysek and Brian Paes-Braga, Founder, CEO and Director, stated: “Today’s announcement successfully delivers on our team’s commitment to maximize value for our shareholders. Lithium X was founded at a minimal market value and went public two years ago, with a mission to help wean the world off fossil fuels through the development of high quality lithium deposits. We believe this $265 million transaction puts our flagship asset, Sal de los Angeles, in the hands of a well-funded, technically capable team. We thank NextView and its partners for their commitment to this transaction and provide our best wishes in their continuing efforts to complete on our mission.”

Mr. Yaping He, Managing Partner of NextView, stated: “The acquisition of Lithium X’s wholly owned flagship project, the Sal de los Angeles lithium project (the “SDLA Project”) represents a key cornerstone investment in NextView’s strategy of developing a leading global player in the new energy sector. The SDLA Project has a mineral resource exceeding 2 million tonnes of lithium carbonate equivalent (“LCE”).”

Transaction summary

The proposed business combination will be effected by way of a Plan of Arrangement completed under the Business Corporations Act (British Columbia). The Arrangement will be subject to the approval of at least 66-⅔% of the votes cast by Lithium X shareholders and warrant holders at a special meeting expected to take place in February 2018. In addition to shareholder approval, the Arrangement is also subject to the receipt of certain regulatory, court and stock exchange approvals and other closing conditions customary in transactions of this nature.

The Arrangement Agreement has been unanimously approved by a special committee of independent directors of Lithium X and by the full board of directors of Lithium X. GMP Securities L.P. (“GMP”) has provided a fairness opinion to the special committee and the board of directors of Lithium X to the effect that, as of the date hereof, based upon and subject to the assumptions, limitations and qualifications set out in such fairness opinion, the consideration under the transaction is fair, from a financial point of view, to Lithium X shareholders.

Directors and executive officers of Lithium X, holding in aggregate approximately 6% of Lithium X’s outstanding common shares have entered into customary voting support agreements in favour of the Arrangement.

The Arrangement Agreement includes customary deal protection provisions including a non-solicitation covenant on the part of Lithium X and gives Lithium X the right to accept a superior proposal in certain circumstances and terminate the Arrangement Agreement. NextView has a five day right to match any superior proposal. The Arrangement Agreement also provides for the payment by Lithium X of a C$15,900,000 termination fee if the Arrangement Agreement is terminated in certain circumstances and also a reverse break fee of C$20,000,000 payable by NextView to Lithium X in circumstances in which the Arrangement is not completed as a result of a default by NextView. The reverse break fee has been secured through the deposit of US$16,000,000 in trust with Lithium X’s counsel in Hong Kong, subject to the terms of an escrow agreement under which those funds may not be released without the consent of both parties.

Further information regarding the Arrangement will be contained in an information circular that Lithium X will prepare, file and mail in due course to shareholders in connection with the special meeting of Lithium X shareholders to be held to consider the Arrangement. Shareholders are urged to read the information circular once available as it will contain additional important information concerning the Arrangement. The Arrangement Agreement will be filed on SEDAR.

Advisors and counsel

GMP acted as financial advisor to the board of Lithium X. Stikeman Elliott LLP is acting as legal counsel to Lithium X. Credit Suisse is acting as financial advisor to NextView. Blake, Cassels & Graydon LLP is acting as legal counsel to NextView.

On behalf of the Board of Directors of Lithium X

By: “Brian Paes-Braga”
President and CEO, Director

On behalf of NextView

By: “Yaping He”
Managing Partner

About Lithium X

Lithium X Energy Corp. is a lithium exploration and development company with a goal of becoming a low-cost supplier for the burgeoning lithium battery industry. The Company holds two projects in in the prolific “Lithium Triangle” in mining friendly Salta province, Argentina as well as participating in the Clayton Valley in Nevada through its ownership interest in Pure Energy Metals Limited (“Pure Energy”). The Company’s wholly owned flagship project is the Sal de los Angeles lithium brine project. The project consists of approximately 8,747.50 hectares of Salar de Diablillos, and has an NI 43-101 mineral resource estimate of 1.037 million tonnes of lithium carbonate equivalent in the indicated category and 1.007 million tonnes of lithium carbonate equivalent in the inferred category. The Company’s second Argentinian project, the Arizaro lithium brine project, consists of 33,846 hectares covering part of the western and eastern portions of the Salar de Azario, one of the largest known salt lakes in the world. In Nevada, the Company consolidated its Clayton Valley holdings with those held by Pure Energy, in the process becoming Pure Energy’s largest shareholder, holding approximately 19% of Pure Energy’s outstanding common shares.

For additional information about Lithium X Energy Corp., please visit the Company’s website at www.lithium-x.com or review the Company’s documents filed on www.sedar.com.

About NextView

NextView is an active investment firm with offices in Beijing and Shanghai. It manages over RMB30 billion assets and invests in new energy, resources, TMT, sports and consumer sectors.

Known for its investment performance in China resources sector, NextView is the second largest shareholder of Tibet Summit Co., Ltd. (“Tibet Summit”). It has also successfully invested in Western Mining Co., Ltd. (“Western Mining”). Both Tibet Summit and West Mining are A-share listed companies in China.

NextView has also been extending its focus into new energy/electric vehicle supply chain. Its recent investments in this space include Nanjing Yuebo Auto Electronics Co., Ltd., a leading company in BEV power system in China with its products supplied to 100,000 BEVs annually, and Bacanora Minerals Ltd., a Toronto and London listed lithium exploration and development company which owns a world class lithium project in Mexico.

In 2017, NextView has teamed up with Tibet Summit to establish a RMB10 billion (c. US$1.5 billion) natural resource fund to acquire overseas mining assets with a focus on the new energy and resources sectors. The funds limited partners will include several well-known financial institutions, including China Huarong Assets Co., Ltd.

NextView is committed to continuing to invest in global lithium resources and new energy/electric vehicle sector, to achieve an influential position globally and take advantage of its unique access to the Chinese market.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein including the use of proceeds constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, including the business of the Company, the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks, and delay, inability to complete a financing or failure to receive regulatory approvals. Specific forward-looking statements in this release include the timing of the special meeting of the Lithium X shareholders and the completion of the Arrangement, including receiving the required regulatory and court approvals. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. The information contained in this release is not investment or financial product advice.

SOURCE: Lithium X Energy Corp.

Glencore, Apollo Bid for Rio Tinto’s $1.5 Billion Coal Assets

December 18, 2022/in News /by cobaltic

By Brett Foley, Scott Deveau, David Stringer, and Perry Williams

Whitehaven, South32, EMR Capital set for second round of sale
Sale includes the Valeria and Winchester South coal projects

Glencore Plc and a group led by Apollo Global Management LLC are among bidders set to be shortlisted for the sale of Rio Tinto Group’s last remaining coal mines, which may fetch more than A$2 billion ($1.5 billion), people familiar with the matter said.

Whitehaven Coal Ltd. and South32 Ltd. also made indicative offers for the Hail Creek and Kestrel mines by the deadline this month, the people said, asking not to be identified because the information is private. The parties, which also include EMR Capital Advisors Pty, are preparing to enter the second round of the sale process, which will include management presentations and site visits, before deciding on final bids, the people said.

A sale would allow Rio, the world’s second-biggest miner, to complete its exit from coal and continue an asset divestment program that has returned more than $7 billion since 2013. This year it agreed to sell $2.69 billion of Australian mines to a company controlled by China’s Yanzhou Coal Mining Co., and Chief Executive Officer Jean-Sebastien Jacques said in September that a rebound in metals and energy prices has opened a window for additional sales.

Representatives for Rio Tinto, Whitehaven, EMR Capital and Glencore declined to comment. A spokesman for South32 said the company continues to focus on identifying new opportunities outside its portfolio, in an emailed response to Bloomberg queries. He declined to comment on the Rio assets.

Apollo Bid

New York-based Apollo is bidding with Xcoal Energy & Resources LLC and Canada Pension Plan Investment Board, the people said. A representative for Xcoal Energy didn’t respond to Bloomberg queries, while Apollo and CPPIB declined to comment.

Rio Tinto controls 82 percent of Hail Creek in the Bowen Basin region of Queensland state. The mine can produce as much as 10 million metric tons of coal a year, according to the firm’s website. It owns 80 percent of Kestrel, which produced 5 million tons of coking and thermal coal in 2016.

The sale process, being run by Credit Suisse Group AG, also includes the Valeria and Winchester South coal projects in Queensland state, people familiar with the matter said in October. A representative for Credit Suisse declined to comment.

Rio Tinto shares rose 1.3 percent in London by 8:06 a.m. local time and touched the highest since mid-November. Glencore added 0.4 percent.

Rio Tinto in September boosted estimates of coal reserves at Kestrel by 62 million tons to 185 million tons, according to an exchange filing. The Valeria project is a semi-soft coking coal and thermal coal deposit close to Kestrel, while Winchester South is a coking coal asset in central Queensland.

Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.

— With assistance by Joe Ryan

Published by Bloomberg News