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How Batteries Sparked a Cobalt Frenzy and What Could Happen Next – by Mark Burton (Bloomberg News – December 17, 2017)

https://www.bloomberg.com/

Cobalt left other metals in the dust this year, driven by demand from electric carmakers like Tesla Inc. But with new supply coming online and high prices likely to spur substitution and recycling, the market for the key battery component could prove choppier next year. Here are five themes that will capture the market’s attention in 2018.

Record Prices

After prices more than tripled in the past two years, cobalt has become a valuable prize for the handful of miners producing it at scale. The global market has increased from about $4 billion a year at the end of 2016 to about $8 billion now and is roughly equal in size to the tin market.

But cobalt could be set to level out in 2018. BMO Capital Markets sees prices averaging about $68,200 a ton from about $72,000 now as Glencore Plc and Eurasian Resources Group ramp up major new projects in 2018 and 2019.

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BMW Sees 10-Fold Jump in Its Need for Battery Materials by 2025 – by Elisabeth Behrmann (Bloomberg News – December 15, 2017)

https://www.bloomberg.com/

BMW AG’s needs for car-battery raw materials such as cobalt and lithium will surge 10-fold by the middle of the next decade, pushing the German carmaker increasingly to forge long-term deals as shortages loom.

Purchase contracts with five- to 10-year time frames are close to being completed, the manufacturer’s head of procurement told reporters in Munich Friday. Concerns about supply bottlenecks, especially for cobalt, have prompted auto producers including Volkswagen AG to step up efforts to ensure they have enough. BMW plans to offer 25 electrified vehicles by 2025, while VW is targeting a 300-model battery-powered lineup by 2030.

“We’ve been intensively focusing on how to manage future cobalt supply for about a year now,” said Markus Duesmann, the BMW purchasing executive. “Before, it wasn’t clear just how quickly demand will accelerate.”

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Australia cobalt rush accelerates on electric vehicle demand, DRC troubles – by Melanie Burton (Reuters Canada – December 15, 2017)

https://ca.reuters.com/

MELBOURNE (Reuters) – Australia, home to the world’s second-biggest cobalt reserves, is seeing a rush of interest in projects still years from production as makers of batteries used in electric vehicles (EVs) seek supplies of the metal from a more costly but less risky source than top miner, the Democratic Republic of Congo.

As auto makers seek to develop greener cars, shares in Clean TeQ CLQ.AX – owner of one of the largest cobalt deposits in Australia – have trebled this year. Minnows Cobalt Blue COB.AX, Australian Mines AUZ.AX, Artemis Resources ARV.AX and Aeon Metals AML.AX have also seen shares surge.

On Friday, Aeon, developing a copper-cobalt project in Queensland, raised A$30 million ($23 million) from institutional investors.

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Chile politics put Potash in tight spot on SQM stake sale – by Dave Sherwood and Felipe Iturrieta (Reuters U.S. – December 14, 2017)

https://www.reuters.com/

SANTIAGO (Reuters) – The chance to own a stake in Chile’s SQM, one of the world’s top lithium producers, has attracted several potential suitors as prices for the so-called white gold – a key ingredient in electric car batteries – have skyrocketed.

But the buyer of the 32 percent of SQM being sold by Canadian Potash Corp of Saskatchewan‘s, which needs to divest the stake as part of a merger, will need to navigate tricky politics well before any deal is inked.

With a presidential election in Chile on Sunday, conservative billionaire Sebastian Pinera has emerged as the favorite with investors, but neither he nor his opponent in the second-round runoff, center-left candidate Alejandro Guillier, have expressed a favorable view of the scandal-plagued miner.

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This Electric Truck Will Probably Beat Tesla’s to Market (Bloomberg News – December 13, 2017)

https://www.bloomberg.com/

On the evening of Nov. 16, Elon Musk unveiled the latest prop in his Tony Stark cosplay. Tesla Inc.’s all-electric semi rig met all the classic Musk product launch criteria: It looked stunning, had unprecedented performance numbers, included features straight out of science fiction, and would arrive at some unknown date at a too-good-to-be-true price from a still-to-be-built assembly line.

Ten miles from the cramped Los Angeles airport hangar where thousands of Muskovites were swooning, a 25-year-old named Dakota Semler watched the performance on his phone, tossed a piece of sushi into his mouth, and shrugged. Semler, you see, has an all-electric semi of his own, a matte-black curvaceous truck known for now as the ET1.

It’s the first vehicle from his startup, Thor Trucks, which hopes to grab a tiny slice of the 940,000-unit-a-year market for semis and go after short-haul trucks, delivery vans, and work vehicles.

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Glencore sees battery minerals powering profit in 2017 and beyond – by Barbara Lewis and Arathy S Nair (Reuters U.K. – December 12, 2017)

https://uk.reuters.com/

LONDON (Reuters) – Miner and trader Glencore (GLEN.L) said on Tuesday its battery minerals, especially cobalt, should spur profit in 2017 and beyond in an update for investors that also promised to grow the business, especially through partnerships.

It said its marketing, or trading, division’s 2017 EBIT (earnings before interest and tax) would be at the top end of its previous guidance at $2.8 billion, steady from 2016 but effectively an increase given that Glencore sold half of its agriculture business last year.

The company also issued full-year 2018 overall EBITDA (earnings before interest, tax, depreciation and amortisation) guidance of $16.2 billion, slightly below some analysts forecasts, but higher than Glencore’s guidance for full-year profit this year of $15 billion.

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Vale’s reality check for nickel’s electric vehicle dreams – by Andy Home (Reuters U.S. – December 12, 2017)

https://www.reuters.com/

Nickel is one of the materials expected to win from the coming electric vehicle (EV) revolution. Electric vehicles will be powered by lithium-ion batteries, which need cobalt and nickel. Indeed, as cobalt’s potentially fragile supply chain comes under ever-increasing scrutiny, battery-makers are likely to try to use less of the stuff in favor of more nickel.

So it might seem strange that the world’s largest nickel producer is actively curtailing capacity at mines and refineries. Yet that is precisely what Brazil’s Vale is doing, removing around 100,000 tonnes of supply over the next two years.

While “everyone knows there are great opportunities” for nickel in the EV sector, “prices are not there”, according to Vale Chief Executive Fabio Schvartsman, speaking at an investor event last week.

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Lithium stocks have had a dazzling year – are there more profits to come? – by Ian McGugan (Globe and Mail – December 12, 2017)

https://www.theglobeandmail.com/

Lithium, a lightweight metal essential to the latest generation of high-tech batteries, possesses two features most investments lack.

For one thing, future demand is nearly certain to surge as battery-driven vehicles grab an increasing share of the automotive market. For another, a handful of companies now dominate production of lithium.

Combine growing demand with today’s oligopoly of producers and it’s clear why three major U.S.-listed lithium miners have been among the best non-bitcoin investments of 2017. Shares of Sociedad Quimica Y Minera de Chile, the Chilean giant better known as SQM, have surged 80 per cent since January. Over the same period, Albemarle Corp., up 45 per cent, and FMC Corp., up 53 per cent, have also enjoyed dazzling runs.

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Small Canadian miners in pole position for electric vehicle battery boon – by Nicole Mordant (Reuters U.S. – December 11, 2017)

https://www.reuters.com/

VANCOUVER (Reuters) – Canadian developers of cobalt and lithium mines stand to benefit from a round of investments from the makers of electric vehicles and the batteries powering them, a potential game-changer for small miners short on money to develop deposits of these critical battery ingredients.

Toronto-listed cobalt companies, Ecobalt Solutions and Fortune Minerals, are in talks, ranging from preliminary to more advanced, with more than a dozen groups, including car and battery makers, on financing their projects, their chief executives told Reuters.

The interest in miners from downstream players along the battery supply chain – a new area of investment for most – would provide a life-line to miners at time when equity funding for developers remains relatively tight after a five-year downturn on weak metals prices.

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Vale cuts nickel output but is positive on long-term demand – by Christian Plumb (Reuters U.S. – December 6, 2017)

https://www.reuters.com/

NEW YORK (Reuters) – Brazilian miner Vale SA dialed back its nickel output forecasts for the next five years on Wednesday, although the world’s top producer of the metal praised its longer term prospects on likely soaring demand for electric cars.

Vale cut its nickel output estimate by 15 percent to 263,000 tonnes next year and said it was still seeking an investor for its New Caledonia nickel mine.

However, Vale wants to “preserve its nickel optionality” ahead of an expected boom in electric vehicles in the next decade, said Jennifer Maki, executive director of Vale’s base metals unit, at an annual investor presentation in New York.

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Electric charge: Glencore bets big on car battery metals – by Barbara Lewis and Maiya Keidan (Reuters Canada – December 5, 2017)

https://ca.reuters.com/

LONDON (Reuters) – Glencore (GLEN.L) has increased production of the metals used to make electric car batteries faster than its major mining rivals, according to an industry-wide analysis that shows the scale of a strategy that has big prospective risks and rewards.

The Anglo-Swiss company’s output of cobalt and copper roughly doubled in the five years to 2016, while its production of nickel quadrupled, the research compiled for Reuters by S&P Global Market Intelligence shows. (Graphic: Glencore’s mining production – tmsnrt.rs/2zOQTgo)

Electric vehicle metals account for roughly 50 percent of Glencore’s core profit, more than double the proportion of its major listed competitors – BHP (BLT.L) (BHP.AX), Rio Tinto (RIO.L) (RIO.AX) and Anglo American (AAL.L).

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Electric vehicle revolution a rare investment opportunity as metals demand spikes – by Henry Lazenby – December 1, 2017)

http://www.miningweekly.com/

VANCOUVER (miningweekly.com) – The rate at which global automotive markets are adopting electric vehicles (EVs) is accelerating at a much faster pace than even some of the keenest market observers estimated at the start of 2017, and is opening up once-in-a-lifetime investment opportunities among the four key ‘energy metals’ – lithium, cobalt, nickel and graphite.

Since the beginning of 2017, the market has reached a new peak of lithium-ion battery capacity in the pipeline. An additional 153 GWh has been added to planned capacity build-outs this year alone, taking the total to 372 GWh.

“But when you look at where we need to be by 2025 – 750 GWh, of which 645 GWh is for EVs – we are still way short. What the megafactory trend is doing, however, is creating a new production base that did not exist before.

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Zimbabwe to miss out on energy mineral spend despite regime change – by Brendan Ryan (MiningMX – November 30, 2017)

http://www.miningmx.com/

WHILE Zimbabwe has the geological resource base to step up production of lithium the political risk in the country is still so great it is highly unlikely any investment for new lithium mines will flow to Zimbabwe despite the recent regime change.

That was the dominant view from a webcast conference organised by the Investing in Mining Indaba which assessed the potential for African countries to cash in on rising demand for “energy minerals” – in particular cobalt and lithium.

Zimbabwe is currently the largest producer of lithium in Africa accounting for some 6% of world supply which it produces mainly as a by-product from other mining operations such as tin.

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How to Mine Cobalt Without Going to Congo – by Anna Hirtenstein (Bloomberg News – December 1, 2017)

https://www.bloomberg.com/

Almost 9,000 miles from the dusty Congo savanna, miners have hit on an entirely new source of cobalt — the rare mineral at the heart of the electric-car boom. And not only can they take coffee breaks, when they take a break, they can grab a donut at Tim Hortons.

Scientists working for American Manganese Inc., located in the suburbs of Vancouver, have developed a way to produce enough of the bluish-gray metal to power all the electric cars on the road today without drilling into the ground: by recycling faulty batteries.

It’s one of many technologies that entrepreneurs are patenting to prepare for a time when electric cars outnumber polluting petrol engines, turning the entire automotive supply chain upside down in the process. Instead of radiators, spark plugs and fuel injectors, the industry will need cheap sources of cobalt, copper and lithium.

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‘Miner’s Revenge’ Is Coming With Electric Cars, Friedland Says – by Thomas Wilson (Bloomberg News – November 30, 2017)

https://www.bloomberg.com/

Surging demand for metals like copper, nickel and cobalt for use in electric vehicles promises to overturn the balance of power between mining companies and their customers, according to billionaire investor Robert Friedland.

Automakers will have to change the way they approach procurement if they want to power their vehicles, said Friedland, who as a student befriended Steve Jobs before a career backing major discoveries from Canada to Mongolia.

“Coming soon to a theater near you: this is the revenge of the miner,” said Friedland. “No miner is willing to sell a high-volatility metal to a car manufacturer at a fixed price.”

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