PLM - Cobalt Miners News For The Month Of December 2022

Summary

• Cobalt spot prices were flat for the month. LME inventory was also flat for the month.
• Cobalt market news - Cobalt metal prices diverge on demand shifts due to strength in aerospace demand and weakness in battery demand notably from consumer electronics.
• ERG: "Total demand for cobalt in the next five years will be higher than all cobalt consumed in the first two decades of this century."
• Cobalt miners news - Glencore settles with the DRC with a US$180 million payment. CMOC mining deals under review as Congo targets windfall profits. Chemaf - Trafigura secures $600m in financing for Congo cobalt mines.
• Jervois Global closes A$231m equity offering. Electra Battery Materials acquires new cobalt project 5.3 sq km land package adjacent to the Iron Creek deposit. Cobalt Blue demonstration plant achieves high grade (95%) concentration results.

Welcome to the December 2022 cobalt miners news.

The past month saw reports of weak cobalt demand from China primarily due to weakness in consumer electronic sales but also due to China shifting to LFP batteries and ending EV subsidies by end 2022. Aerospace demand has helped offset this as has cobalt supply disruptions in 2022, notably from CMOC's DRC mine. Looking out to the mid-term and long-term, cobalt demand is forecast to increase significantly with deficits forecast.

Cobalt price news

As of December 22, the cobalt spot price was flat at US$23.24/lb , flat from US$23.25/lb last month. The LME cobalt price is US$50,985/tonne . LME Cobalt inventory is 165 tonnes, the same as the 165 level from last month. More details on cobalt pricing (in particular the more relevant cobalt sulphate), can be found here at Benchmark Mineral Intelligence or Fast Markets MB .

Cobalt spot prices - 5-year chart - USD 23.24 ( source )

Cobalt demand v supply forecasts

UBS cobalt supply and demand forecast (as of 2021) - Growing deficits from 2023

BMI 2022 forecast for cobalt - Deficits building starting from 2024

Trend Investing v IEA demand forecast for EV metals ( Trend Investing ) ( IEA )

2021 IEA forecast growth in demand for selected minerals from clean energy technologies by scenario, 2040 relative to 2020 - Increases Of Lithium 13x to 42x, Graphite 8x to 25x, Cobalt 6x to 21x, Nickel 7x to 19x, Manganese 3x to 8x, Rare Earths 3x to 7x, And Copper 2x to 3x

2022 - BMI forecasts we need 330+ new EV metal mines from 2022 to 2035 to meet surging demand - 62 new 5,000tpa cobalt mines (drops to 38 if include recycling)

Cobalt market news

On December 1 S&P Global reported :

Commodities 2023: Term negotiations for 2023 cobalt challenging as China demand slumps, supplies surge... Term negotiations for 2023 cobalt took a challenging turn for sellers following the severe decline in demand from China, which pressured prices and left the market well supplied ahead of next year's expected surplus... Sulfate plunges on sluggish consumer electronics... While the Chinese EV sector has since rebounded, the consumer electronics sector, making up 30% of global cobalt demand, struggled against weaker consumer spending... "The scrapping of EV subsidies in China next year is definitely impacting consumers' appetite for raw materials," a Chinese precursor maker said.

On December 1 Seeking Alpha reported :

ProShares launches an ETF meant to capitalize on the growing demand for batteries... ProShares is looking to capture with the launch of the ProShares S&P Global Core Battery Metals ETF ( ION ). The fund, which hit the market on Thursday, offers exposure to global stocks involved in the mining of lithium, nickel or cobalt. According to ProShares research, global demand for batteries is anticipated to expand by 25% annually until at least 2030.

On December 7 Argus Media reported :

Cobalt metal prices diverge on demand shifts. Global cobalt metal prices have diverged on a reversal in demand across global markets, with strength now coming from aerospace and alloying applications, and weakness in chemical markets feeding certain types of battery... Since China went into sporadic local lockdowns in March, there has been a sharp drop in demand for electronics batteries and electric vehicle (EV) batteries. While the EV market recovered, the electronics sector recovery failed to materialise, resulting in a swift downturn in cobalt prices in China.

On December 13 Investing News reported :

"Caspar Rawles: Cathodes, anodes and what to expect in 2023... "Fundamentally, one of the challenges that potentially plays into all of this, is that you can build the battery plants, you can build the EV plants, you can build the cathode plants, but if you don't have the raw materials to feed them, they're just expensive weights on your balance sheet," Rawles said.

Cobalt company news

Glencore [HK:805] [LSE:GLEN] ( OTCPK:GLCNF )

On December 5, Glencore announced :

Glencore reaches agreement with the Democratic Republic of Congo over past conduct... Under the Agreement, Glencore International AG, on behalf of its Congolese-associated companies, will pay the DRC US$180 million and will continue to implement in the DRC the Ethics and Compliance Programme the Company committed to continue to implement in its resolution with the DOJ. The Agreement is governed by Congolese law and the only admissions made are in respect of the conduct already acknowledged in Glencore's resolution with the DOJ.

On December 5, Glencore announced :

ACE Green Recycling signs inter-continental Offtake Agreement with Glencore...

CMOC Group Limited [HKSE:3993] [SHE:603993] ( OTCPK:CMCLF ) (formerly China Molybdenum)

On November 23, Bloomberg reported : "Chinese mining deals under review as Congo targets windfall profits." Highlights include:

• "Premier wants Sicomines, Tenke disputes resolved by year-end.
• Government says terms of 2008 mining accord are inequitable."

On December 7, Mining.com reported :

China's CMOC Group Ltd hit back at what it called "wild overcharges" from Congo's state mining company Gecamines... Now Gecamines is asking CMOC for between $2 billion and $2.5 billion in cash and a bigger stake of between 49% and 51% in TFM, an official close to the negotiations said, declining to be named because the talks are confidential.

Zheijiang Huayou Cobalt [SHA:603799]

On November 24, Zhejiang Huayou Cobalt announced :

Chen Xuehua, Chairman of the Group attends the B20 Summit and signs the Definitive Cooperation Agreement with Vale Indonesia...

On December 14, Trading View reported : "Zhejiang Huayou Cobalt to invest 400 Mln Yuan in investment fund."

Jinchuan Group International Resources [HK:2362]

No significant news for the month.

Chemaf (subsidiary of Shalina Resources)

On November 21, Mining.com reported :

Trafigura gets $600m from Africa's TDB for Congo cobalt mines. Commodities trader Trafigura has agreed a $600 million syndicated financing facility with the Eastern and Southern African Trade and Development Bank (TDB) to develop cobalt and copper mines in the Democratic Republic of Congo. Trafigura said the funding would enable it to complete Congo miner Chemaf's new mechanised mine at Mutoshi, processing plant in Kolwezi, and the expansion of its Etoile mine and processing plant in Lubumbashi...

GEM Co Ltd [SHE:002340]

No news for the month.

Investors can read more about GEM Co in the Trend Investing article: " A Look At GEM Co Ltd - The World's Largest Battery Recycling Company " when GEM Co was trading at CNY 5.08.

Eurasian Resources Group ("ERG") - private

ERG own the Metalkol facility in the DRC where ERG processes cobalt and copper tailings with a capacity of up to 24,000 tonnes of cobalt pa.

On December 6, ERG, announced :

ERG and Gécamines restart operations at Boss Mining in the DRC. Eurasian Resources Group (ERG) and its joint-venture partner, La Générale des Carrières et des Mines (Gécamines), celebrated the kick-off of the restart of operations at Boss Mining with a ceremony held at its concession on 23 November 2022.

On December 19, ERG announced :

Views on the cobalt, copper and aluminium markets for 2023: from Eurasian Resources Group. Cobalt supply facing huge downside risks, whilst demand continues to surge - the market could quickly transition from a moderate surplus to a deficit in 2023.Total demand for cobalt in the next five years will be higher than all cobalt consumed in the first two decades of this century.

Umicore SA [Brussels:UMI] ( OTCPK:UMICY )

On November 24, Umicore SA announced :

Umicore completes € 591 million sustainability linked private debt placement. Umicore has successfully completed the issue of a fixed-rate, sustainability linked US Private Placement Notes for a total principal amount of € 591 million equivalent ¹ ... The transaction, of which the funds will be drawn upon in January 2023, is composed of several tranches with maturities ranging from 5 to 12 years corresponding to a weighted average maturity of more than eight years.

On December 1, Umicore SA announced :

Umicore and PowerCo explore long-term strategic supply agreement for EV battery materials in North America. Umicore and PowerCo, Volkswagen's battery company, aim to extend their collaboration in battery materials and are exploring a strategic long-term supply agreement ¹ to serve PowerCo's future battery Gigafactory for electric vehicles (EVs) in North America.

Sumitomo Metal Mining Co. (TYO:5713) ( OTCPK:STMNF )

No cobalt news for the month.

MMC Norilsk Nickel [LSX:MNOD] [GR:NNIC] ( OTC:NILSY ) (ADRs to remain in circulation until April 28, 2023 )

On December 16, MMC Norilsk Nickel announced :

Nornickel approves budget for 2023. Under the 2023 investment programme, the key projects will be supported, including Sulphur Programme 2.0, mining projects, projects to maintain the infrastructure of fuel and energy assets in the Norilsk Industrial District, replace equipment and carry out capitalised repairs, as well as social projects. Next year, the Company will pass the peak of the investment cycle. Thus, CAPEX is expected to rise 10% year-on-year to USD 4.7 bn.

OZ Minerals [ASX:OZL] ( OTCPK:OZMLF )

On December 20, OZ Minerals announced : "Exclusivity period with BHP extended by one week..."

On December 21, OZ Minerals announced : "Annual Mineral Resource and Ore Reserve update demonstrates portfolio of long-life assets..."

Sherritt International [TSX:S] ( OTCPK:SHERF )

On December 1, Sherritt International announced :

Sherritt agrees to purchase $90 million of secured second Lien and Junior Notes pursuant to oversubscribed offers.

Nickel 28 [TSXV:NKL] [GR:3JC] ( OTCPK:CONXF )

On December 20, Nickel 28 announced: "Nickel 28 files fiscal Q3 financial statements." Highlights include:

The Company's principal asset, an 8.56% joint-venture interest in the Ramu Nickel-Cobalt ("Ramu") integrated operation in Papua New Guinea, had another outstanding quarter. Highlights from Ramu and the Company during the quarter include:

• "Total net and comprehensive income of $7.6 million ($0.08/share) for the three months ended October 31, 2022, largely as a result of the Company's share of operating profit from Ramu Nickel Mine.
• Sales of 13,961 tonnes of contained nickel and 1,198 tonnes of contained cobalt in mixed hydroxide product ("MHP") during the third calendar quarter, well in excess of production, reducing inventory that had been built up earlier in the year.
• Production of 8,939 tonnes of contained nickel and 759 tonnes of contained cobalt in MHP during the third calendar quarter, placing Ramu as the number one producer of MHP globally.
• Actual cash costs for the third calendar quarter, net of by-product sales, of US$4.34/lb. of contained nickel.
• Strong quarter end cash balance of US$3.5 million, providing ample liquidity for the Company.
• A cash distribution for H1 2022 of $1.7 million was received after quarter end, as well as the repayment of $3.2 million of construction debt, which occurred on July 1, 2022.
• A construction debt balance of $73.0 million as at October 31, 2022."

Investors can view the company presentations here .

Jervois Global Limited [ASX:JRV] [TSXV: JRV] ( OTCQX:JRVMF ) [FRA: IHS] (formerly Jervois Mining)

On November 28, Jervois Global Limited announced : "Jervois appoints AFRY to lead Kokkola expansion BFS." Highlights include:

• "...BFS scope is to expand Jervois' annual refinery capacity access from 6,250 metric tonnes to at least 12,250 metric tonnes of refined cobalt, to meet rising demand.
• Expansion will further expand and consolidate Jervois's status as a globally significant supplier of cobalt products for batteries and other industries, with leading ESG credentials.
• BFS will be delivered and publicly released in Q3 2023, coinciding with OEM (automaker) feedback and rising cobalt volume requests."

On December 8, Jervois Global Limited announced :

Jervois closes A$231, million equity offering... Together with the institutional placement and institutional component of the entitlement offer ("Offer"), a total of 549,598,088 New Shares at A$0.42 per share (the "Offer Price") were issued, for aggregate gross proceeds of approximately A$231 million (US$150 million1).

Upcoming catalysts include:

• End Q1, 2023 - Idaho Cobalt Operations to reach nameplate capacity production.
• Q1, 2024 - First production targeted from the São Miguel Paulista Refinery.

Electra Battery Materials [TSXV:ELBM] ( ELBM )

On December 14, Electra reported : "Electra acquires new cobalt project and provides update on exploration activities in Idaho." Highlights include:

• "Optioned a 5.3 km ² land package adjacent to the Iron Creek deposit with historic drilling highlights that include 25 metres at 0.51% cobalt and 7.5 ppm gold from 77.5 to 83.8 metres in historic drilling.
• Additional mineralization intercepted on the eastern extension of the Iron Creek resource area of 7.9 m at 0.22% cobalt in IC22-01 from 228.8 to 236.6 m.
• Additional mineralization intercepted at the Ruby Target, 1.5 km southeast of the Iron Creek deposit, of 4.3 m at 0.25% cobalt in IC22-04 from 211.4 to 215.8 m.
• Permitting underway for a 10-year, 92 drill pad plan of operations with the U.S. Department of Agriculture's Forest Service (USFS) to conduct systematic exploration at the camp scale on Iron Creek, Ruby, CAS, and additional exploration targets within Electra's 32.6 km ² land package..."

Upcoming catalysts include:

Early 2023 - Target to have their Ontario cobalt refinery operational with ore feed from Glencore.

Investors can view the company presentations here and a recent Trend Investing article on Electra here .

Possible mid-term producers (2024 onwards)

Sunrise Energy Metals Limited [ASX:SRL]( OTCQX:SREMF )(formerly Clean TeQ)

Sunrise Energy Metals has 132 kt contained cobalt at their Sunrise project.

On December 20, Sunrise Energy Metals Limited announced :

Sunrise Project receives conditional offer for $10 million grant from NSW Critical Minerals and High-Tech Metals Activation Fund. CEO and Managing Director, Sam Riggall, said: "The offer of a $10 million grant towards the development of the Sunrise Project clearly demonstrates the NSW Government's commitment to providing material financial assistance to project developers like Sunrise Energy Metals to bring Australia's critical minerals and high-tech metals projects to fruition..."

Upcoming catalysts include:

2023 - Possible off-take agreements and project funding/partnering.

Investors can also read the latest company presentation here.

Australian Mines [ASX:AUZ] ( OTCPK:AMSLF )

No significant news for the month.

Investors can read the latest company presentation here.

Upcoming catalysts include:

• End March 2023 - Targeted Collaborative Partnership agreement and Sponsorship to fund the company through to FID for the Sconi Project in Q1 FY26

Ardea Resources [ASX:ARL] ( OTCPK:ARRRF )

In total, Ardea has 5.9mt of contained nickel and 380kt of contained cobalt at their KNP Project near Kalgoorlie in Western Australia. Ardea is also exploring for gold and nickel sulphide on their >5,100 km2 of 100% controlled tenements in the Eastern Goldfields region of Western Australia.

On November 24, Ardea Resources announced : "Ardea completes KNP ESG accreditation from independent leading global platform..."

Upcoming catalysts include:

• 2023 - Possible off-take partner and funding for the GNCP Project. Further potential exploration results including also for lithium, rare earths, and nickel sulphide.

Investors can read the latest company presentation here.

Cobalt Blue Holdings [ASX:COB] ( OTCPK:CBBHF )

Cobalt Blue has 81.1kt of contained cobalt at their 100% owned Broken Hill Cobalt Project [BHCP] (formerly Thackaringa Cobalt Project) in NSW, Australia. LG International is an equity strategic partner.

On December 5, Cobalt Blue Holdings announced :

Non?renounceable entitlement issue results and shortfall placement. The total funds raised under the Placement, Entitlement Issue and Shortfall Placement will be $22,311,391.

On December 9, Cobalt Blue Holdings announced : "Demonstration plant - High grade concentration results." Highlights include:

• "Concentrator circuit has now completed processing 4200 t of ore, yielding 680 t of concentrate.
• Grades of gravity circuit concentrate consistently averaged 4400 ppm cobalt during operations.
• The combined recovery for the concentrator circuit was typically 95%, exceeding the recoveries obtained in the 2020 Project Update (PFS level study) of 90%.
• First large scale Mixed Hydroxide Precipitate (MHP) is expected in December, with continuous operation of the leach and MHP circuits planned from January.
• The Demonstration Plant operations are on track to deliver the initial 'process plant design criteria' for the Definitive Feasibility Study by the end of Q1 2023."

Upcoming catalysts include:

• 2023/24 - Possible off-take agreements. Feasibility Study & project approvals. Final Investment decision. Project Funding.

Investors can watch a CEO interview here and a recent presentation here .

Havilah Resources [ASX:HAV] [GR:FWL]

Havilah 100% own the Mutooroo copper-cobalt project about 60km west of Broken Hill in South Australia. They also have the nearby Kalkaroo copper-gold-cobalt project ( optioned to Oz Minerals ), as well as a potentially large iron ore project at Grants. Havilah's 100% owned Kalkaroo copper-gold-cobalt deposit contains JORC Mineral Resources of 1.1 million tonnes of copper, 3.1 million ounces of gold and 23,200 tonnes of cobalt.

On November 30, Havilah Resources announced : "Quarterly activities and cash flow report - Period ended 31 October 2022." Highlights include:

• "At the general meeting of shareholders held on 31 August 2022, the Board sought and obtained Havilah shareholder approval of the Proposed Transaction and disposal of interest in the Kalkaroo copper-gold-cobalt project in accordance with the Kalkaroo Transaction. The resolution received a 99.78% vote (cast on a poll) in favour.
• The full form definitive agreements executed with OZ Minerals Limited (ASX: OZL) on 25 July 2022, that covers all aspects of the Approved Transaction, became effective on 31 August 2022.
• On 20 September 2022 Havilah received from OZ Exploration Pty Ltd (a wholly owned subsidiary of OZ Minerals Limited) the first 3 months of funding under the Strategic Alliance agreement that was signed on 25 July 2022, paid as a lump sum of $3,000,000.
• Study and site works commenced on the Kalkaroo project by OZ Exploration.
• Preparatory activities for the Curnamona Province Strategic Alliance exploration drilling program.
• Resource expansion drilling program at the Mutooroo deposit continued to intersect copper-cobalt massive sulphide lodes largely where expected..."

For further details see:

Cobalt Miners News For The Month Of December 2022