ARL (ASX) Largest cobalt resource with lowest valuation

Originally posted by accaeric ↑

Cobalt price peaked at near US$50/lb in 1977.
Currently US$21.77/lb.

Considerably more cobalt is used in a lithium-ion battery than graphite, and LiNiCoAlO3 (Li-NCA) batteries, the type planned by Tesla, typically have 9% cobalt by weight. That equates to roughly 6kg of cobalt per vehicle.

Tesla factory could potentially lift cobalt battery demand by 30,000-35,000t/year.

Cobalt is a metal of the future with growing demand in technology, health and energy industries of the modern world
Lithium-ion batteries, the main components of electric vehicle motors and many rechargeable batteries, contain as much as 60% cobalt. A sustained cobalt price growth could occur over the next few years as the electric car battery market expands in line with demand for low emission vehicles.
Tesla Motors is designing the world’s largest lithium-cobalt-ion battery factory, the ‘gigafactory’ and is planning to produce batteries for 500,000 cars in 2020. The gigafactory alone will require an additional 6,750 tons of cobalt when operating at full capacity.
Considerably more cobalt is used in a lithium-ion battery than graphite, and LiNiCoAlO3 (Li-NCA) batteries, the type planned by Tesla, typically have 9% cobalt by weight. That equates to roughly 6kg of cobalt per vehicle.
If Tesla’s plan to double the output of lithium-ion batteries progresses they will have far-reaching consequences for the cobalt market. In 2013 about 42% of current cobalt production was used in the rechargeable battery industry and the impact of the Tesla factory could potentially lift cobalt battery demand by 30,000-35,000t/year.
South Korea’s LG Chem Ltd has battery factories in the US and South Korea and is planning to build a new electric-car battery factory in China with annual production capacity of batteries for more than 100,000 electric vehicles when it opens in 2015. The move comes as auto makers are rushing to introduce electric vehicles in China, driven by the government’s plan to put 500,000 electric cars on the road by 2015 and five million by 2020
China is planning for electric cars to make up at least 30% of government vehicles by 2016 in a measure to reduce pollution and lower energy use. The ratio will be raised beyond 2016, when local provinces are required to meet the target.
China is encouraging wider use of electric vehicles and has identified electric automobiles as a strategic industry to help it gain global leadership, reduce energy dependence and cut smog that often reaches extreme pollution levels in Beijing and other cities. In mid 2014 China announced that it would drop a 10% purchase tax for electric vehicles, excluding them from the levy which commences on 1 September, 2014.
Samsung SDI is also planning new cobalt battery production and will supply BMW cars. The SDI battery cells will be supply BMW’s electric i3 city car and the plug-in hybrid i8 sports car as well as “additional hybrid models” in the coming years.
Sales of hybrids and electric vehicles are projected to grow steadily to reach 5.2 million units by 2020, or 7.3 percent of all passenger vehicles, according to a November 2010 report by J.D. Power & Associates. According to Japanese research firm B3, the global market for automotive lithium-ion batteries is expected to increase to $21.3 billion in 2020 from $4.4 billion in 2014.
For recent references on how batteries underline the importance of cobalt in future energy industries please see the following articles:

Cobalt in Batteries – Diminishing but Not Disappearing (Cobalt Investing News: 7 July 2011)

Types of Lithium Iron Batteries: Battery University

Because cobalt is integral to defence, aerospace, and the energy industry and because cobalt is threatened by supply disruptions due to limited domestic production it is a designated ‘Strategic Metal’ in the USA, China, Japan and Europe. The US Geological Survey recently reported that the USA has not mined cobalt since 1971, and has only about 301 tonnes stockpiled.

Figure 10: 2011 Cobalt mine production

Cobalt

mining

and

supply

In summary:

Co is mostly produced as a bi-product from some copper or nickel mines

From the estimated 98,000t (216 million pounds) of cobalt produced in 2011;

Over 60% came from the Democratic Republic of Congo (DRC)

Over 40% was refined in China

Over 80% was consumed by the USA, Japan and the EU

No cobalt was mined in the USA, Japan, or the EU

The DRC contains about half of the world’s known cobalt resources.

Cobalt is mostly produced as a by-product of either nickel mining or as an additional metal by-product in some copper mines, most of which are located in the Democratic Republic of Congo (DRC) in central Africa an area of common social upheaval and high political and economic risk. For a recent article on the uses of cobalt click here.
Cobalt is integral to the defence, aerospace and the energy industries of the major world economies. USA, Japan, China and the European Union have negligible mine production of cobalt despite being the major cobalt users and producers of cobalt products. These countries recognise the threat of cobalt supply disruption and have designated cobalt as a strategic metal.
Clearly, as a by-product, mine production of cobalt from African copper and nickel deposits cannot easily be increased to supply the market in times of high cobalt demand, supply disruption or when the cobalt price undergoes a significant increase. Having relatively high-grade cobalt contained in cobalt-dominant deposits near Broken Hill provides considerable supply advantages for Broken Hill Prospecting for future development of the resources.
Deposits of cobalt of significant size and mine-grade are few and geographically isolated. Near Broken Hill, a distinctive type of deposit has been recognised by BPL and a new depositional model has assisted BPL to successfully find large areas of near-surface cobalt mineralisation.
Broken Hill Prospecting has large cobaltiferous pyrite deposits which could be mined by open cut, can be readily upgraded to a Co-pyrite concentrate and may provide a reliable and alternative source for the world cobalt market.
BPL has several future options…. BPL could mine and export a cobalt-pyrite concentrate, process the concentrate on site or at another location and use one of a number of processing methods.

Cobalt

prices

Cobalt prices during the last two years have ranged between US$13-15/lb and the metal has not seen the same recent steep price rises of gold, silver and some base metals, despite peaks of near $50 in 1977 and prior to the Global financial Crisis in 2007. For a chart showing historical cobalt metal prices from 1976 to the present day click here.

http://www.bhpl.biz/projects/cobalt-deposits/cobalt-research/

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Pretty sure the Model S has about 46kg of graphite in the Anode and Cobalt is c. 15% of the Cathode, which may be the 6kg stated in the article however definitely raises some questions about the Cobalt Development Institute...

Still think Cobalt has some of the best prospects of all the critical minerals though.

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