TMC - Cobalt Miners News For The Month Of December 2023

2023-12-23 01:13:46 ET

Summary

• Cobalt spot prices were lower for the month. LME inventory was flat for the month.
• Cobalt market news - U.S. releases FEOC rules. U.S. to create a critical mineral 'Resilient Resource Reserve' to "sustain" the price of a critical mineral when prices fall (includes cobalt).
• Cobalt miners news - Glencore's Mutanda mine to produce less cobalt on ore depletion - sources. GEM Co and GAC Group signed a Strategic Cooperation Agreement.
• Cobalt Blue to progress Cobalt-Nickel Refinery Project in 2024 with Iwatani Corporation to potentially partner. Havilah-BHP Kalkaroo alliance to end as BHP choose not to exercise their Kalkaroo Call Option.

Welcome to the December 2023 cobalt miners news.

The past month saw weaker cobalt prices and forecasts of more oversupply mostly due to China expanding cobalt mining in the DRC and Indonesia. There was a glimmer of hope with the U.S announcing the creation of a critical mineral 'Resilient Resource Reserve' to "sustain the price of a critical mineral when prices fall below a certain threshold".

Cobalt price news

As of December 22, the cobalt spot price was at US$12.90/lb , lower than US$14.86/lb last month. The LME cobalt price is US$28,210/tonne . LME Cobalt inventory is 92 tonnes, the same as the 92 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 12.90 ( source )

Cobalt demand v supply forecasts

You can view the latest Trend Investing cobalt demand v supply article here .

S&P Global Intelligence cobalt demand v supply forecast as of Aug. 2023 (deficit in 2027) ( source )

Cobalt supply and demand forecast - Deficits growing from ~2025/26 (forecast as of 2023 by Cobalt Blue, Benchmark Mineral Intelligence, & Rho Motion) ( source )

Benchmark Mineral Intelligence forecasts deficits for lithium, nickel & cobalt to increase from 2027 onwards ( source )

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 Energy.gov announced : "Department of Energy releases proposed interpretive guidance on Foreign Entity of Concern for public comment."

On December 5 Fastmarkets reported :

A Foreign Entity of Concern (FEOC) includes any foreign entity that is “owned by, controlled by or subject to the jurisdiction or direction of a government of a covered nation”. Those countries that currently fall into this “covered nation” category are China, Russia, North Korea and Iran...Starting from next year, with a period of transition, companies that have a more than 25% ownership or control by a FEOC – including board seats, voting rights or equity – will not be eligible for tax credits available under the Inflation Reduction Act (IRA). “To strengthen the security of America’s supply chains, beginning in 2024, an eligible clean vehicle may not contain any battery components that are manufactured or assembled by a FEOC, and, beginning in 2025, an eligible clean vehicle may not contain any critical minerals that were extracted, processed or recycled by a FEOC,” the Department stated...

On December 7 Reuters reported :

China turbo-charges cobalt mine output despite price crash...New projects in Congo and Indonesia fuelling glut...China's CMOC Group, which boosted its cobalt output by 144% during the first three quarters of 2023, is now on track to become the world's biggest cobalt producer, overtaking commodity group Glencore...While lower cobalt prices may revive use of higher-cobalt batteries, content of the metal in popular nickel manganese cobalt (NMC) batteries has been declining, while lithium iron phosphate (LFP) batteries contain none at all. Global refined cobalt supply is expected to climb 23% this year, creating a surplus of 74,800 metric tons by 2024, according to Morgan Stanley...Indonesia is expected to roughly quadruple its production of cobalt in mixed hydroxide precipitate (MHP) by 2033 and may expand even further if all projects go ahead, Project Blue forecasts. "In the next five years or so, we think they'll be oversupply in the market. So essentially that's going to mean prices are going to remain low for the foreseeable future," said Thomas Matthews at CRU.

Morgan Stanley forecasts cobalt surpluses to grow this decade (as of Nov. 2023) ( source )

On December 14 Fastmarkets reported :

The US House of Representatives Select Committee on Strategic Competition between the US and Chinese Communist Party recommended congress to authorize the creation of a critical mineral “Resilient Resource Reserve,” it said in a report with around 150 policy recommendations published on Tuesday December 12. The adoption of such a reserve is intended to “insulate American producers from price volatility and (the People’s Republic of China’s) weaponization of its dominance in critical mineral supply chains,” according to the report. Such a reserve would be used to sustain the price of a critical mineral when prices fall below a certain threshold and would be replenished through contribution from companies when prices are “significantly” higher, the report stated. The fund would target critical metals where there is high price volatility, low US domestic production and import dependence on China. Cobalt, manganese, light and heavy rare earths, vanadium, gallium, graphite, germanium and boron are critical minerals that fall under that category , according to the report.

Note: Bold emphasis by the author.

Cobalt company news

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

On November 27 Reuters reported :

Glencore's Mutanda mine to produce less cobalt on ore depletion - sources. Depleting ore grades of cobalt deposits at Glencore's Mutanda mine in Congo means the miner will produce up to 15% less a year of the battery metal, three sources with knowledge of the matter said...

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

No significant news for the month.

Zheijiang Huayou Cobalt [SHA:603799]

No significant news for the month.

Jinchuan Group International Resources [HK:2362]

No significant news for the month.

Chemaf (subsidiary of Shalina Resources)

No news for the month.

Note: An October 2023 Reuters report quoted : "Chemaf SA ...is up for sale as it deals with a cash crunch."

GEM Co Ltd [SHE:002340]

On December 2, GEM Co Ltd announced :

GEM and GAC Group signed a Strategic Cooperation Agreement. In order to promote the development of the global green supply chain, meet the global carbon proportion requirements for the use of new energy materials and achieve the new energy industry from "green" to "green", on November 29, 2023, GEM and Guangzhou Automobile Group Co., Ltd. (hereinafter referred to as "GAC Group") signed the "Strategic Cooperation Agreement between GAC Group and GEM to jointly build a new energy full life cycle value chain" at the GAC Automobile Center...

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.

No news for the month.

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

On December 5, Umicore SA announced : "Umicore broke ground for its large-scale fuel cell catalyst plant in China..."

Sumitomo Metal Mining Co. (TYO:5713) ( Sumitomo Metal Mining Co., Ltd. ( OTCPK:STMNF ) Stock Price Today, Quote & News)

On December 4, Sumitomo Metal Mining Co. announced : "Sumitomo Metal Mining issued the SMM Group Sustainability Report 2023..."

MMC Norilsk Nickel [LSX:MNOD] [GR:NNIC] ( OTC:NILSY )

On December 14, MMC Norilsk Nickel announced : "Nornickel publishes first-ever climate change report..."

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

No news for the month.

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

On December 19, Nickel 28 announced : "Nickel 28 files Fiscal Q3 Financial Statements."

Electra Battery Materials [TSXV:ELBM] ( ELBM )

On November 28, Electra Battery Materials announced : "Electra and Rock Tech Lithium sign Lithium Recycling MOU for North American Market..."

On December 1, Electra Battery Materials announced : "Electra announces proposed amendments to outstanding warrants."

Possible mid-term producers (2025 onwards)

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

On December 13, Jervois Global Limited announced :

Jervois welcomes U.S. Congressional Select Committee proposal for a reserve to sustain cobalt price...The proposed Resilient Resource Reserve is designed to insulate U.S. critical mineral producers, including cobalt, from the current price volatility resulting from China’s dominance of global critical mineral supply chains.

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

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

No news for the month.

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

In total, Ardea has 6.1Mt of contained nickel and 386,000t 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 : "Results of 2023 Annual General Meeting."

On December 21, Ardea Resources announced :

Ardea and Japanese Consortium: Update on progress on KNP - Goongarrie Hub..."Ardea and the Consortium will continue to negotiate binding Final Agreements, expected to be executed by the end of Quarter 1, 2024, to form a joint venture to facilitate the completion of the KNP Goongarrie Hub DFS, make a Final Investment Decision [FID] and jointly secure project development funding to develop this globally significant nickel-cobalt resource...

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

Cobalt Blue has 87kt 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 November 27, Cobalt Blue Holdings announced :

Strategic update: COB to progress Cobalt-Nickel Refinery Project in 2024. The Refinery is a proposed large-scale, cobalt-nickel operation representing Australia’s first cobalt refinery that will produce high-quality, battery-grade cobalt sulphate that is intended for IRA-compliant markets. It will be among the first large Allied Nation investments in cobalt refining for decades. The Refinery is expected to establish COB as an early entrant into the emerging midstream segment of the Allied Battery Supply Chain. The Refinery: Stage 1 targets processing third-party feedstock with a capacity of 3,000 tpa cobalt sulphate and 1,000 tpa nickel sulphate. Stage 2 offers optionality for the inclusion of feedstock from the Broken Hill Cobalt Project (BHCP). The Study presents a compelling evaluation of a cobalt and nickel refining business that is expected to generate stable margins throughout the highs and lows of the cobalt price cycle. On a 100% owned basis...The advancement of the Cobalt-Nickel Refinery significantly de-risks the downstream portion of the BHCP. BHCP Feasibility Studies are progressing, focusing on finalising/optimising capital and operating estimates, with the Feasibility Study now likely to be delivered in April 2024.

On November 30, Cobalt Blue Holdings announced : "BHCP resource update." Highlights include:

• "Measured Resources have increased by 32% when compared with the former estimate (2021).
• The updated Mineral Resource estimate for the Broken Hill Cobalt Project (BHCP) now comprises 126.5 Mt at 867 ppm cobalt-equivalent (CoEq) (690 ppm cobalt, 7.5% sulphur and 134 ppm nickel) for 87 kt contained cobalt, 9,510 kt sulphur and 17 kt nickel (at a 275ppm CoEq cut-off).
• Infill drilling has supported an improved resource classification for the Big Hill deposit with 31% of tonnes classified as Measured and a further 54% classified as Indicated.
• Measured and Indicated resources now comprise 66% of the total Mineral Resource.
• The estimate is a major stepping stone in completion of the Definitive Feasibility Study [DFS] and will form the basis of detailed mine planning and scheduling."

On December 1, Cobalt Blue Holdings announced : "Iwatani Corporation to partner on cobalt-nickel refinery." Highlights include:

• "Cobalt Blue Holdings Limited (Cobalt Blue) (ASX:COB) is delighted to name Iwatani Corporation as our potential partner in developing the Cobalt-Nickel Refinery Project (subject to binding agreement).
• Senior Iwatani Corporation executives recently visited our Broken Hill based Demonstration Plant.
• Detailed engineering continues as part of the Refinery project pre-construction phase.
• The Demonstration Plant has started large scale test work of third-party material to support Refinery project technical studies...."

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

December 6, Australian Mines announced : "Acquisition of Brazil Rare Earth/ Niobium & Lithium Projects..."

December 13, Australian Mines announced : "First tranche funds received."

Upcoming catalysts include:

• End of 2025/early 2026 - FID for the Sconi Project.

Havilah Resources [ASX:HAV] [GR:FWL] ( OTCPK:HAVRF )

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, 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 29, Havilah Resources announced : "Quarterly activities and cash flow report - Period ended 31 October 2023." Highlights include:

• "BHP’s Study Program continued to confirm, and in some cases improve, Havilah’s earlier pre-feasibility study [PFS] results for the Kalkaroo copper gold-cobalt project (Kalkaroo or the Project)...
• Wide mineralised quartz-sulphide lode intersected at Cockburn prospect within the MPA, namely 70 metres of 0.33 g/t gold, 0.15% copper and 0.11% cobalt (0.89% CuEq or 1.14 g/t AuEq) from 68 metres downhole...
• Release of Havilah’s 2023 Annual Report to shareholders, highlighting a busy period, with many significant achievements over the financial year..."

On December 19, Havilah Resources announced : "Havilah-BHP Kalkaroo alliance to end." Highlights include:

• "Following completion of an internal review of the Kalkaroo Study Program results, BHP Group Limited (ASX: BHP) has advised that it will not exercise the Kalkaroo Call Option to acquire the Kalkaroo copper-gold-cobalt project (Kalkaroo or the Project) in northeastern South Australia.
• Havilah has engaged Deutsche Bank to assist in approaching parties who have expressed interest in Kalkaroo.
• Key technical outcomes of BHP’s work are supportive of Havilah’s previous work at Kalkaroo. The projected conceptual open pit mine life was increased to more than 20 years, driven by a number of factors including higher long-term metal price assumptions and improved sulphide ore metal recoveries.
• Havilah retains full ownership of all surrounding exploration areas, where the Curnamona Province Strategic Alliance (Strategic Alliance) drilling has returned encouraging results from four copper prospects with large scale potential within 15 km trucking distance of Kalkaroo."

Aeon Metals [ASX:AML] ( OTC:AEOMF )

Aeon Metals 100% own their Walford Creek copper-cobalt project in Queensland Australia.

No news for the month.

Alliance Nickel Limited [ASX:AXN] ( OTC:GMRSF ) (Formerly GME Resources)

Alliance Nickel own the NiWest Nickel-Cobalt Project located adjacent to Glencore’s Murrin Murrin Nickel operations in the North Eastern Goldfields of Western Australia. The NiWest Project which has an estimated 830,000 tonnes of nickel metal and 52,000 tonnes of cobalt.

No significant news for the month.

Global Energy Metals Corp. [TSXV:GEMC][GR:5GE1] ( OTCQB:GBLEF )

On December 7, Global Energy Metals Corp. announced :

Global Energy Metals provides technical update on Nevada-based Lovelock and Treasure Box Copper-Nickel-Cobalt Projects and files NI 43-101 technical report...

Giga Metals Corp. [TSXV:GIGA][FSE: BRR2] ( OTCQX:GIGGF ) Turnagain Nickel-Cobalt Project is now held via the JV company Hard Creek Nickel Corporation [TSXV:HNC] (HNCKF) ( 85% Giga Metals: 15% Mitsubishi Corp.)

On December 6, Giga Metals Corp. announced :

Giga Metals engages market maker...Giga has engaged Independent Trading Group as Market Maker, subject to regulatory approval. ITG will provide market-making services in accordance with TSX Venture Exchange TSXV, CSE, NEO policies. ITG will trade shares of the Company on the CSE/ NEO/ TSXV and all other trading venues with the objective of maintaining a reasonable market and improving the liquidity of the Company's common shares. Under the agreement, ITG will receive compensation of $5,500 per month, payable monthly in advance. The agreement is for an initial term of three months and will renew for additional one-month terms unless terminated. The agreement may be terminated by either party with 30 days' notice. There are no performance factors contained in the agreement and ITG will not receive shares or options as compensation. ITG and the Company are unrelated and unaffiliated entities and at the time of the agreement, neither ITG nor its principals have an interest, directly or indirectly, in the securities of the Company.

The Metals Company ( TMC )

On November 29, The Metals Company announced :

New Benchmark study highlights impacts of nickel and cobalt mining on critical forested carbon sinks amid battery metals boom...The study finds that 1 kg of nickel mined from saprolite and limonite ore in Sulawesi removes forests containing carbon stock equivalent to 7.0 and 9.4 kg of CO ₂ e, and 1 kg of cobalt mined in Katanga removes 3.6 kg of CO ₂ e. Resulting vegetation change also causes carbon sequestration services loss of 4.8g and 6.5g of CO ₂ e respectively for nickel, and 9.3g of CO ₂ e for cobalt per year.

On December 12, The Metals Company announced :

Thirty-one members of congress call upon Pentagon to develop plan for processing deep-sea polymetallic nodules...

On December 14, The Metals Company announced : "TMC subsidiary NORI shares preliminary findings on environmental impacts of pilot nodule collection system test." Highlights include:

• "Nauru Ocean Resources Inc. (NORI) has begun sharing emerging data on impacts of seafloor sediment plumes one year on from its 2022 test mining campaign.
• Building upon earlier laboratory predictions and in-field verifications, NORI now has multiple lines of evidence that indicate that the seafloor plume forms a gravity-driven turbidity current that hugs the seafloor and does not loft into the water column to be transported long distances by ocean currents, as has been widely speculated.
• Additional qualitative data acquired this month using a Remotely Operated Vehicle (ROV) at the seafloor in the NORI-D area show that sessile organisms identified during NORI’s environmental baseline studies are still present twelve months after its pilot nodule collection system test in areas that have been influenced by the seafloor plume.
• In the coming months, NORI will release additional data on midwater sediment plumes which will further address concerns as to the scope and scale of their distribution."

Chilean Cobalt Corp. (OTCQB:COBA)

Chilean Cobalt Corp. (“C3”) is a critical minerals exploration and development company focused on the La Cobaltera Project located in Chile’s historic San Juan cobalt district.

For further details see:

Cobalt Miners News For The Month Of December 2023