Cobalt Outlook

1. "The refined cobalt market will fall into a 3,000 tonne deficit this year following seven years of overcapacity and oversupply.  CRU anticipates prices to increase onward into 2017 as global demand for refined cobalt exceeds the 100 kt mark and mine and refined supply tightens." http://www.crugroup.com/market-analysis/products/cobaltmarketoutlook

2. Cobalt, as we reported previously, is the secret ingredient in lithium ion batteries. Battery-electric vehicles like Tesla’s contain approximately 50kg, or about 10% of the total battery weight, in every car. As we had anticipated, the price of cobalt went up by more than 20% over the past six months (from around $10.80/lb to now $13.40/lb).

“In recent times there were stockpiles and excess inventory from the previous period of overproduction keeping the price down”, explains Hattan. These reserves have now been used up. “Cobalt is only a 100,000 ton /year market. If there is a shortage in supply by even 5 or 10% which we expect to hit by the first half of next year, then you are going to feel that”.

“An additional problem is that the battery market, which is not just in electric vehicles but also in smartphones and other portable electronic devices, once consumed about 40% of the available cobalt. It is now closing in on 50% because of the demand in electric vehicles. You have Tesla, BMW, Nissan, GM, Mercedes Benz… it’s going to be a very competitive market”.

http://news.metal.com/newscontent/100700616/cobalt-prices-on-the-rise-amidst-ethical-concerns

3. The basic battery commodities are lithium, graphite and cobalt, but very few companies are focused on mining the latter. It is typically a by-product of copper mining, with the largest production coming from Democratic Republic of Congo (DRC). Some reports suggest that this year 60 percent of the world’s cobalt supply will come from the DRC, which could be an issue for companies that want full visibility of their resource supply chain.

Tesla may only use 1 percent of the world’s lithium, but it holds a far bigger share of the public’s view on this growth in the market. The same is true for cobalt. Tesla has said it will produce over 500,000 electrically powered vehicles by 2018, and each one will need an electric battery containing lithium, graphite and cobalt.

http://investingnews.com/daily/reso...ting/cobalt-investing/cobalt-demand-forecast/

4. Production of cobalt, used in the lithium batteries that power everything from smartphones to electric cars, is set to soar in the Democratic Republic of the Congo (DRC), thanks to the country's low operating costs and strong projects pipeline, a new study published Tuesday shows.

http://www.mining.com/congos-cobalt-production-set-soar-despite-claims-child-labour/


5. "The trouble with sourcing cobalt is the limited number of mines globally. It is currently sourced as a byproduct from nickel or copper deposits." “Most of the mines are based in Africa, Uganda and the Congo,” Mr Wendt said.
“It’s not a fantastic place to be for a mining company, you’ve always got the risk of instability.”

http://www.perthnow.com.au/business...e/news-story/f8e91cb6ef7ddcc4f7a207a3f90cc75e