MCRZF - Cobalt Miners News For The Month Of July 2023

2023-07-26 12:16:24 ET

Summary

• Cobalt spot prices were significantly higher for the month. LME inventory was unchanged for the month.
• Cobalt market news - "Most analysts predict supply will continue to exceed demand in 2023". LFP batteries extend dominance over NCM batteries in China.
• Cobalt miners news - Glencore H1, 2023 production of 21,700 tonnes of cobalt, up 5% YoY. CMOC agrees to pay Congo's Gecamines $800 million to end spat.
• Electra makes first customer shipment of recycled nickel-cobalt produced at its refinery complex. Ardea Resources KNP Project FS - Post-tax NPV7% of A$4,980M and IRR of 23%, signs MOU with Sumitomo Metal Mining, Mitsubishi Corporation, and Mitsui & Co.
• Australian Mines Sconi Battery Minerals Project - Greenvale Mining Lease approval. The Metals Company - US Congress directs Pentagon to assess domestic processing of polymetallic nodules.

Welcome to the July 2023 cobalt miners news.

The past month saw some cobalt price recovery and generally a good month of cobalt company news.

Cobalt price news

As of July 25, the cobalt spot price was at US$14.85/lb , significantly higher than US$13.08/lb last month. The LME cobalt price is US$32,475/tonne . LME Cobalt inventory is 93 tonnes, the same as the 93 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 14.85 ( source )

Cobalt demand v supply forecasts

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

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 July 19, Investing News reported :

Cobalt market update: Q2 2023 in review.....cobalt prices have been facing downward pressure since mid-2022, and even though the market has seen some recovery, most analysts predict supply will continue to exceed demand in 2023....... (This year) is not going to record the cobalt demand growth we saw in 2022, but the market is still there; demand is still there,” Aubry said. “Spot purchasing from Chinese nickel-cobalt-manganese (NCM) cathode manufacturers recently picked back up … while China’s latest subsidy announcement lends additional EV support to the cobalt market in the near term.”.......In other segments aside from EVs, Benchmark Mineral Intelligence expects demand for portable consumer electronics to remain flat, with little to no growth expected over the next few years for lithium-cobalt-oxide batteries......But a sector that will continue to see demand growth is superalloys, where cobalt is used in high-intensity use cases such as jet engines and military machinery....... In the short term, Benchmark Mineral Intelligence expects a greater level of oversupply driven by more Indonesian projects coming online, as well as increased output in the DRC by major mines like Katanga and Tenke Fungurume. “Long term we still expect a supply deficit from 2027, unchanged from our previous forecasts,” Aubry said.

On July 19, Fastmarkets reported :

LFP batteries extend dominance over NCM batteries in China. China’s preference for lithium iron phosphate (LFP) batteries continued to grow in June, with the country’s output of such batteries rising by 11.64% month on month to 42.2 gigawatt hours [GWh].....China’s output of nickel cobalt manganese (NCM) batteries declined by 4.48% to 17.7 GWh in June, CABIA figures show...... LFP batteries accounted for 65.81% of China’s total battery output in the first six months of 2023, while NCM batteries made up 33.91%. This compares with the same period last year, when LFP accounted for 61.10% of total production and NCM 38.77%, according to CABIA......The cost of a LFP battery cell is about 15-20% lower than that for NCM 523 (Ni:Co:Mn 5:2:3) and NCM 622 battery cells, and more than 20% lower than an NCM 811 battery cell, according to Vicky Zhao , senior battery raw materials analyst at Fastmarkets.

On July 20, Fastmarkets reported :

Tata Group’s UK gigafactory to produce cobalt and lithium-based batteries. Tata Group announced this week that it is to invest £4 billion ($5.2 billion) in a 40GW battery cell ‘gigafactory’ in the UK - producing both lithium and cobalt-based batteries for car manufacturers in the UK and across Europe.

Cobalt company news

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

On June 21, Glencore announced : "Half-year production report 2023." Highlights include:

• "Own sourced cobalt production of 21,700 tonnes was 1,000 tonnes (5%) higher than H1 2022, reflecting improved recoveries at Katanga.

• Full year production guidance remains unchanged from that presented in Glencore's Q1 2023 Production Report and December 2022 investor update."

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

On July 18, Market Screener reported :

China's CMOC agrees to pay Congo's Gecamines $800 million to end spat. CMOC said in a statement it will start paying the settlement fee this year and complete payment by 2028.

Zheijiang Huayou Cobalt [SHA:603799]

On July 5, Reuters reported :

China's Huayou commissions $300 million Zimbabwe lithium plant. Huayou acquired the Arcadia hard rock deposit, 40 kilometres outside Harare, from Australia-listed Prospect Resources (PSC.AX) for $422 million in April 2022. The Chinese company invested a further $300 million to build a plant to produce 450,000 metric tons of lithium concentrates annually.

Jinchuan Group International Resources [HK:2362]

On June 23, Jinchuan Group International Resources announced :

Profit warning.....the Group is expected to record a loss attributable to the shareholders of the Company for the six months ended 30 June 2023 (the “Period”) in the range between US$0 to 20 million as compared to the profit attributable to shareholders of the Company of approximately US$49.1 million recorded for the same period in 2022.....

Chemaf (subsidiary of Shalina Resources)

No cobalt news for the month.

GEM Co. Ltd. [SHE:002340]

On July 17, GEM Co Ltd announced : "Wuhan Power Battery Recycling signs strategic agreement with Sany Robotics."

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 June 27, Eurasian Resources Group announced :

Eurasian Resources Group welcomes China’s $72 billion investment in EV sector......The investment will make electric vehicles cheaper for consumers, with EVs sold in 2024 and 2025 to be exempt from purchase tax, and the exemption to be halved in 2026 and 2027.

Umicore SA [Brussels:UMI] ( UMICY )

No significant news for the month.

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

No significant news for the month.

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

On July 6, MMC Norilsk Nickel announced :

Nornickel sells U.S.-based metals distributor in an all-cash transaction. Norilsk Nickel USA, Inc., Nornickel’s exclusive distribution company for nickel, platinum group metals, and cobalt in the Americas, has been acquired in an all-cash transaction by TMP Metals Group, Inc.

Sherritt International [TSX:S] ( SHERF )

On June 22, Sherritt International announced : " Sherritt releases its 2022 sustainability reports."

On June 27, Sherritt International announced :

Sherritt receives final 2023 cobalt dividend and $64 million cash top-up dividend under its Cobalt Swap Agreement.....it has received the 2023 annual maximum volume of cobalt dividends and a $64 million cash top-up dividend, fully satisfying its Cuban partner’s current year obligation owed to Sherritt under the Cobalt Swap agreement. In addition, Sherritt intends to pay cash interest on its 10.75% unsecured PIK option notes due 2029 (Junior PIK Notes) in settlement of its July 2023 interest payment. All amounts are in Canadian currency unless otherwise noted.....

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

On June 28, Nickel 28 announced : "Nickel 28 files fiscal Q1 financial statements." Highlights include:

• "Production of 9,016 tonnes of contained nickel and 798 tonnes of contained cobalt in MHP during the first calendar quarter, placing Ramu as one of the top producers of mixed hydroxide precipitate (“MHP”) globally.
• Sales of 7,914 tonnes of contained nickel and 673 tonnes of contained cobalt in MHP during the first calendar quarter.
• Actual cash costs for the first calendar quarter, net of by-product sales, of US$3.12/lb. of contained nickel, a 32% reduction compared to Q4 2022;
• Strong quarter end cash balance of US$10.6 million.
• Total net and comprehensive income of US$0.5 million (US$0.01/share) for the three months ended April 30, 2023, largely as a result of the Company’s share of operating profit from Ramu Nickel Mine.
• Receipt by the Company of a cash distribution of approximately US$9.7M from Ramu for its distributable share of the mine’s operating surpluses for the second half of calendar 2022.
• Total non-recourse construction debt of US$56.5 million as at April 30, 2023."

Investors can view the company presentations here .

Electra Battery Materials [TSXV:ELBM] ( ELBM )

On June 26, Electra Battery Materials announced :

Electra announces commitment for Strategic Investment from First Nation-Owned Three Fires Group......The Three Fires investment is expected to form part of a larger financing by Electra totaling up to $20 million. All amounts are in Canadian currency unless noted..... “Following a successful black mass recycling trial at our battery materials park in Temiskaming Shores, the strategic investment by Three Fires will help us to prioritize our focus and accelerate development of a permanent 2,500 tonne per annum recycling refinery, resulting in near-term cash flow at a low capital intensity while we continue to advance the cobalt sulfate refinery.”

On July 12, Electra Battery Materials announced :

Electra announces Brokered Private Placement for gross proceeds of up to $10 million.

On July 17, Electra Battery Materials announced :

Electra makes first customer shipment of recycled nickel-cobalt produced at its refinery complex. Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM) (“Electra” or the “Company”) today announced the first customer shipment of nickel-cobalt produced at its refinery complex north of Toronto from recycled battery material. Using Electra’s proprietary hydrometallurgical process, the nickel-cobalt mixed hydroxide precipitate product (“MHP”) was produced in the Company’s black mass recycling trial currently underway at its permitted, low-carbon hydrometallurgical refinery.

On July 24 Electra Battery Materials announced :

Electra enhances terms of Cobalt Supply Agreement with LG Energy Solution......Electra will now supply LG Energy Solution with 19,000 tonnes of battery grade cobalt over a five-year period beginning in 2025.

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

Possible mid-term producers (2024 onwards)

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

On June 28, Jervois Global announced : "Jervois to issue US$25M Unsecured Convertible Notes and launches underwritten US$25M Entitlement Offer."

On June 30, Jervois Global announced : "Jervois 2022 Sustainability Report....."

On July 3, Jervois Global announced : "Jervois successfully completes Institutional Entitlement Offer component of its US$50M Capital Raising....."

On July 20, Jervois Global announced : "Jervois issues US$19.9M Tranche 1 Convertible Notes...."

On July 21, Jervois Global announced : "Jervois completes Retail Entitlement Offer component of its US$50M capital raising....."

Upcoming catalysts include:

• Any announcements regarding Jervois Global's ATVM loan application to the U.S. Department of Energy
• Restart of final construction at ICO. News regarding the refinancing of the restart of the São Miguel Paulista Refinery.

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

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

On June 30, Sunrise Energy Metals Limited announced :

Patent application filed for lithium-ion battery cathode innovation..... Independent test work programs were undertaken on LIB’s using nickel-cobalt-manganese (NCM) chemistry at Queensland University of Technology (QUT) and NEI Corporation [NEI] in New Jersey, USA.....

Upcoming catalysts include:

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

Investors can also read the latest company presentation here.

Ardea Resources [ASX:ARL] ( 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 June 30, Ardea Resources announced :

Kalgoorlie Nickel Project Mineral Resource estimate exceeds 6 million tonne contained nickel.....The KNP global Mineral Resource Estimate (using a 0.5% Ni cut-off grade) now stands at 854Mt at 0.71% Ni and 0.045% Co for 6.1Mt of contained nickel and 386kt of contained cobalt.....

On July 5, Ardea Resources announced : "KNP Goongarrie Hub Ore Reserve & Feasibility Study defines +40 year operation with strong financial metrics." Highlights include:

• "Ore Reserve – 194.1Mt at 0.70% Ni and 0.05% Co for 1.36Mt of contained nickel and 99,000t of contained cobalt.
• Mining optimisation studies have projected production of approximately 30,000t of nickel and 2,000t of cobalt per year for more than 40 years. Year 1 to 5 (post ramp up) production >34ktpa nickel and >3ktpa cobalt.
• Conventional low-cost open pit mining methods result in mining costs comprising less than 12% of total operating cost with a very low strip ratio at an average of 1.5 for the first 35 years of mine life.
• The project generates3: Pre-tax NPV7 of A$7,625M and IRR of 30%. Post-tax NPV7 of A$4,980M and IRR of 23%. Average Annual EBITA of A$800M. Project pay back within 3.1 years.
• Direct cash cost after Co by products of US$3,763/t Ni in MHP during the first five years of operation, and US$5,763/t Ni in MHP over life of mine.
• Total capital cost of A$3,117m, including process plant and infrastructure cost of A$2,264M and sulphuric acid, steam, and power plant cost of $574M.
• Life Cycle Assessment [LCA] is expected to be 11.9 kg CO2 eq. per kg nickel in MHP based on Ardea’s Scope 1, 2 and upstream Scope 3 emissions.
• In-pit tailings disposal minimises environmental footprint and enables mine site rehabilitation, concurrent with steady-state mine operation."

On July 5, Ardea Resources announced : "Ardea Kalgoorlie Nickel Project MOU with Sumitomo Metal Mining, Mitsubishi Corporation, and Mitsui & Co." Highlights include:

• "Non-binding MOU signed with a Japanese Consortium consisting of Sumitomo Metal Mining, Mitsubishi Corporation, and Mitsui & Co. to develop the Kalgoorlie Nickel Project - Goongarrie Hub.
• The Consortium is to first work with Ardea to define a scope of work for the Goongarrie Hub Definitive Feasibility Study.
• The Consortium is to sole fund the Definitive Feasibility Study upon agreeing on the scope.
• Future work is aimed at completing the Definitive Feasibility Study including various additional technical programs identified in the current Preliminary Feasibility Study, making a Final Investment Decision and securing project development funding for the Goongarrie Hub to become a globally significant producer of nickel-cobalt for the Lithium Ion Battery sector."

On July 17, Ardea Resources announced :

Kalgoorlie Nickel Project Goongarrie Hub Tenement Consolidation.....The transaction allows Ardea to divest non-core gold exploration tenements within the northern sector of the Goongarrie Hub and acquire key tenements for both strategic infrastructure and potential resource growth for the Goongarrie Hub nickel-cobalt project development.....

Upcoming catalysts include:

• 2023 - Possible off-take partner agreement (MOU already signed) 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] ( 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 June 27, Cobalt Blue Holdings announced :

Flin Flon Tailings Testwork Agreement with Hudbay Minerals Inc.....COB has agreed to utilise its proprietary minerals processing technology to assess the ability to recover gold, silver, copper, zinc, cobalt and sulphur from a pyrite/pyrrhotite concentrate produced from the tailings. COB’s proprietary technology offers the potential to convert the sulphides into elemental sulphur, which is stable and benign. The testwork program is expected to take up to 4 months to complete once the tailings sample is received from Hudbay.

Upcoming catalysts include:

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

For further details see: