Perth Now article today: WA mining: red-hot demand for cobalt with prices set to escalate

WA mining companies want to exploit the red-hot demand for cobalt with prices set to escalate in the next four years. File image
WA Business
WA mining: red-hot demand for cobalt with prices set to escalate

VETTI KAKULAS, Business Reporter, PerthNow
October 6, 2016 3:40pm

WA mining companies want to exploit the red-hot demand for cobalt with prices set to escalate in the next four years.
Commodities research group CRU has forecast global demand for refined cobalt will exceed the 100,000-tonne mark for the first time in 2017. And it could exceed 150,000 by 2025.
The metal is used in smartphones, laptops and aircraft engine superalloys, and is a major component in lithium-ion batteries used in electric cars.
MineLife senior resource analyst Gavin Wendt said there was growing excitement around the lithium-ion battery market.
“As a result investors are looking at the commodities that could benefit from surging demand for these particular batteries,” he said.
“The commodity that’s least well known is cobalt, because lithium has been a star. It has a very significant role to play as a constituent in lithium-ion batteries.”

Trucks leaving a Murrin Murrin nickel and cobalt processing facility in WA. File image
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.”

Two WA projects currently mine cobalt – Minara Resources’ Murrin Murrin nickel-cobalt operation in WA’s northeastern Goldfields, and First Quantum Minerals’ Ravensthorpe project, 550km southeast of Perth.
Dragon Energy managing director Jonathan King expects the growth in electric cars to drive demand for cobalt.
His exploration company last month acquired the Tabac cobalt-gold project, 30km west of Wiluna in WA’s northern Goldfields.
“There’s simply not enough dedicated cobalt production happening around the globe that will meet the growth in the lithium market,” Mr King said.
“Cobalt’s in an explosive situation and WA is one of the best places to mine for it.
“WA also has a successful track record for rapid project development, including Sirius Resources, Sandfire Resources and Doray Minerals.”
Bell Potter Securities dealer Giuliano Sala Tenna said while cobalt was a “sexy commodity” its market was smaller than lithium.
“Demand for cobalt will go up hitched to the lithium battery story,” he said