Nice catch there mate & cheers all for the warm welcome back.
http://www.mining.com/web/erg-will-suspend-copper-cobalt-output-congo-mine-month/It seems that there is a lot of scratching around to trim the fat from Congo operations by miners there. I’m guessing some interesting accounting techniques will be made use of so as to defend against the increased royalties etc. ( ‘getting rid of workers’ could be somewhat deceptive- what workers? Are they local or FIFO? Are they to be replaced? )
That trick will only work for so long & if it is found to have been done with the main driver easily being perceived as reducing the tax etc take by the DRC gov. we will see some very interesting moves by them to make good those perceived ‘losses’ ( that which they never had but could have received even if only in their imagination ).
I got my first phone call from our team today & had a brief but informative chat. It seems that we have been offered a lot of SK type deals where potential buyers seek to lock in our supply for no money down. I firmly believe we are 100% justified in refusing such deals.
We are operating from a position of strength & our orebodies are amenable to a low OPEX ( ongoing cost to extract minerals ), pathway.
Even our 2.25 (?)Mt case study is only a first step when we consider that we have a 700Mt orebody ( round figure ) & that we have at least one other ore body of a similar size. The plan is to build on success- get that first train running, then add another... & another as is necessary at the time.
Softening cobalt base prices have of course taken some heat out of the scene but the same as any supply vs demand scenario lower base prices actually encourage greater utilisation of the material in question & therefore bind the end users to higher demand for a longer time ( even if battery chemistries change a battery maker can’t just flip a switch- most of the time they have to invest large amounts of time & money to make a change to their processing method ). At the same time it also cuts future supply growth which means that base prices will slowly but surely go up.
Basically there will be a couple less teams in the room offering future supply & with softer prices there will be more teams wanting to buy that supply.
While the softer prices for nickel & cobalt cut down the number of competitors & increase the number of future buyers the strength of gold this year will give us all an extra boost & yet another reward for our participation in this project which we are all part owners of.
Good. Good. Good.
(20min delay)