GSR (ASX) Cobalt/Nickel/Gold news

Originally posted by Solarbat: ↑

Morning all,

I've started a new thread just for market news relating to Barra's three core metals, cobalt, nickel and gold.

To kick things off, below is an excellent post from the consistently brilliant @THE squash, posted this morning on the ARL thread. Thanks Squashy!

Solarbat

I've been trying to get my head around the fall in cobalt prices particularly after the katanga debacle. The latest quarterly from katanga website details concerns with the proposed ion exchange solution for addressing uranium levels by the government, and so further delays on that project. They are forecasting ZERO sales/exports for 2019. Yep, zero. And still don't have in principle support from the government for their proposed engineering solution. There is no news covering this accurately and up to date from what I've seen. I've copied below from the quarterly. Based on forecast production of 26kt for the year that's 20-25% of global supply unavailable in 2019.

On January 30, 2019, the Company’s 75% operating subsidiary Kamoto Copper Company (“KCC”) received a letter from the DRC Minister of Mines following the inspection conducted by the DRC Government in Q4 2018. The Minister of Mines raised certain concerns with the technical solutions identified by KCC and requested that KCC suspend the project to build an ion exchange plant until further notice. KCC intends to engage with the Ministry of Mines to understand and address their concerns. Subject to (i) obtaining the necessary authorizations for the ion exchange plant and (ii) the completion of a feasibility study including the detailed engineering design of such plant, the commissioning of the ion exchange plant is expected to commence in Q4 2019. Annual cobalt production guidance for FY2019 remains unchanged at 26kt[1], however sales of the FY2019 cobalt production are now expected mostly to be recognized in FY2020

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And in response to @THE squash,

Enter the elephant in the room: China. It's not just that the world will need more cobalt. It's that what there is will be tightly controlled by China, giving them a huge advantage in the EV revolution over the next 5-10 years.

As we all know, China now controls 8 of 14 DRC cobalt mines, and an even higher % of global refining capacity. I think the strategic importance of this to China, the risk to Japan, S Korea, Germany and the US, and the opportunities it will create for Australian companies like [BAR] are yet to be fully realised by many battery minerals investors. Of course many of you will be across this, but for those keen to read more, below are a couple of excellent articles exploring China's cobalt movements.

1: China's control of mines and refineries: https://www.bloomberg.com/graphics/2018-china-cobalt/

2: China's manipulation of cobalt and lithium prices (a year or so out of date): https://unauthorised investment advice/resources/china-is-manipulating-lithium-and-cobalt-prices-mining-magnate-says/

If only our government was even a fraction as clever...

Solarbat