Thanks
@Motorheadbeany for spotting this article.
The looming cobalt shortage is such an interesting story and it's only a matter of time before Australian papers/media pick it up and make a big deal of the opportunities for Australian miners in the way they picked up the Lithium story early in the year. The fact that there has yet to be any media attention is part of what makes me feel we have something of an undiscovered gem with Mt Thirsty. Let's see what happens...
http://business.financialpost.com/midas-letter/after-lithium-is-cobalt-the-next-boom
After lithium, is cobalt the next boom?
MidasLetter | September 1, 2016 | Last Updated: Sep 1 8:41 AM ET
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Junior Kannah/AFP/Getty ImagesCobalt is most often produced as a by-product of copper deposits, with 64 per cent of production coming from the Democratic Republic of Congo in 2012.
Cruz Capital Corp. (
CVE:CUZ) (
OTCMKTS:BKTPF) (
FRA:BRO2) CEO James Nelson had a feeling that, while the world is very focused on lithium, there was another ingredient in lithium-ion batteries that was going to suffer from a shortage of supply just as demand exploded. That ingredient is cobalt.
Cobalt is a hard, shiny and grey metal that has many strategic and irreplaceable industrial uses as a result of its unique properties; a high melting point (1,493°C) and retaining its strength to a high temperature; being ferromagnetic with a high thermo-stability and being multivalent, thus enhancing catalytic action.
Because of these properties, cobalt is a common ingredient in lithium-ion cathodes. Cobalt offers the highest energy density but is thermally less stable and cannot deliver high load currents. But its high specific energy makes Li-cobalt the popular choice for mobile phones, laptops and digital cameras. The battery consists of a cobalt oxide cathode and a graphite carbon anode. The cathode has a layered structure and during discharge, lithium ions move from the anode to the cathode. The flow reverses on charge.
Related
Cobalt does not commonly exist in nature in its native form. It is most often produced as a by-product of nickel and/or copper deposits. Sixty-six per cent of cobalt production is a by-product of copper, 31 per cent from nickel, and only 3 per cent from primary cobalt operations. Sixty-four per cent of global cobalt production came from the Democratic Republic of Congo in 2012.
While current supplies of cobalt are sufficient to service demand, changes in supply dynamics are seen as potentially resulting in shortages in the next couple of years as battery-related consumption could potentially throw the market into deficit.
China currently supplies roughly 62 per cent of global refined cobalt. Around 93 per cent of China’s cobalt originates in the DRC, according to analysts at Macquarie, the highest proportion of commodity supply from a single country.
According to an
article in the Financial Times earlier this year, “companies that make batteries for carmakers, from Tesla Motors to General Motors, will be increasingly reliant on Chinese-controlled supply chains as they scale up production of the electric cars Western policymakers hope will help cut emissions and reliance on imported oil.”
Cruz on the Cobalt Acquisition Trail
Cruz has been at the forefront of junior mining companies in Canada seeking to position themselves for any major jump in cobalt demand. The company has acquired control of seven different cobalt prospects in Ontario and British Columbia. Cruz CEO James Nelson says, “Management feels that cobalt will receive an increased focus in the future and our corporate goal is to be global leader in this burgeoning sector. Cobalt prices continue to show strength and have just closed at a new six-month high.”
Chris Berry of House Mountain Partners said in an interview in June: “I think one of the things that’s surprised me is how most people haven’t woken up to the opportunity. Again, we can get into a lot of the details about battery and battery metals and how important lithium is, or cobalt is or graphite is, but I think cobalt is really sort of an undiscovered opportunity right now and hopefully that will change soon.”
There are only a few junior exploration companies in the world that are committed to cobalt exploration as their primary commodity. At this point, Cruz Capital has the most diverse portfolio, and all within the relative safety of Canada.
Also noteworthy is Cruz’s very low share issuance, which gives it a real advantage in terms of raising capital at a lower cost than other companies with exponentially greater share issuances.
James West is an investor and the author of the Midas Letter, an investing research report focused on Canadian markets. The views expressed here are his own and are presented for general informational purposes only — they should not be construed as advice to invest in any securities mentioned.
James West and/or associated funds do not own shares in any securities mentioned in this article. For the full Midas Letter disclosure policy, click here. Postmedia and Midas Letter have a revenue sharing arrangement.
