COB is now at a delicate position.
The true underlying risk for COB, does not come from the Demand for Cobalt, it is from Funding + Timing.
Though cobalt is being phased out, the pace is rather a soft & gradual. The fact is, Cobalt will still be required in a foreseeable future: a decade+. Surely the % will be diminished, but, as a high-end recipe, it will be needed in a much larger dimension.
COB needs another $250m to be able to fully kick off. If a A-list partner want to invest a large chunk of $$$, the most effective way to hedge their risk, is to obtain a controlling interest in the Mine itself.
Surely COB is aiming to produce an OEM product, but as I type, everything remains on a theory. For a “Partner”, they will want an Escrow, that is regardless of the success of this future Product, they need to own a substantial part of your asset – the Mine itself.
This explains why Joel Crane emphasized that the Mine, is COB’s only asset and they don’t tend to give it away, in his last interview with Crux Investor. His comment, indeed reveals COB’s current delicate situation.
Why would a partner be willing to invest into a declining technology compost, without a promising guarantee? Mind you, COB’s current effective production lifespan is only 16x years. Impressive, but certainly not grand.
In real world, the return of this investment could be ~5 years. If cobalt could no longer maintain its superior status in the battery formula after 5/10 years, would this investment still be worthy, from today’s point of view?
COB pushed back the commercial production timeline, from 2023 to 2025. I sincerely hope that they do understand that, Funding + Timing, are their biggest enemies.
For COB, Newtons’ 3rd law, “To move forward, we have to leave something behind”.
