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 February 04, 2015
Short Q&A: Tony Southgate, Cobalt Production Manager, ENRC Marketing
    Publisher: Argusmedia.com

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -

Ahead of February's NiCoMo 2015 conference, we got in touch with speaker Tony Southgate, Cobalt Product Manager at ENRC. In this short Q&A we spoke to Mr.Southgate about:

The role of China in the cobalt market and the impact of the slowdown - How the aerospace and battery sectors have influenced the landscape of the cobalt market - The impact of copper prices on the cobalt industry - The evolution of the cobalt market and defining events

An excerpt from the report:

Argus: There has been much talk about increased orders from the aerospace and battery sectors changing the landscape of the cobalt market. Do you see this as realistic and, if so, when do you see it happening?

TS: We are already seeing the effect of increased orders from aerospace and battery sectors. The overall healthy nature of these two end-uses is giving consumers the confidence to lock in more volumes in 2015 on a long-term basis. The demand picture for Cobalt over the next 2-3 years is widely viewed as being robust, and the only concerns are on the supply side.

To read the short Q&A with Tony Southgate click on image below...

About Argus

Argus is an independent media organisation with over 700 full time staff. It is headquartered in London and has offices in each of the world's principal commodity centres. Its main activities comprise publishing market reports containing price assessments, market commentary and news, and business intelligence reports that analyse market and industry trends.

Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, LPG, natural gas, electricity, coal, emissions, bioenergy, fertilizer, petrochemical, metals and transportation industries. Data provided by Argus are widely used for indexation of physical trade. Companies, governments and international agencies use Argus information for analysis and planning purposes.

Argus has 20 offices globally, including London, Houston, Washington, New York, Calgary, Rio de Janeiro, Singapore, Dubai, Beijing, Tokyo, Sydney, Moscow, Astana, Riga and other key centres of the commodity industries. Argus was founded in 1970 and is a privately held UK-registered company.

 
 February 03, 2015
Sherritt International - Massive Upside As Cobalt Prices Revert
    Publisher: Seeking Alpha

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -

Just as the China demand story sent cobalt prices soaring 300-1000%, global adoption of electric vehicles should create a similar pricing environment.

Cobalt Has Already Experienced a Major Structural Upheaval

Today the main source of cobalt is as a by-product of copper and nickel mining. The copper belt in the Democratic Republic of the Congo and Zambia yields most of the cobalt mined worldwide. Although the majority of the worlds cobalt supply is originally sourced from the DRC, only a fraction of this is actually refined within the country itself. Primary export markets for DRC's production are China, Finland, Zambia and Belgium. Here, these materials are either refined into cobalt metal or into downstream chemical products or specialty materials.

Along with other major metals, China has become the single largest cobalt consumer in the world, sending cobalt production volumes skyrocketing. As can be expected, prices also dramatically readjusted with blossoming demand, with supply largely bottlenecked to high risk countries such as the DRC (source: U.S. Geological Survey).

Following a short but intense period of industry consolidation fewer than ten producers account for over 80% of China's total refined cobalt output. Having little cobalt resources of its own, China imports over 90% of its cobalt raw material requirements from the DRC.

While Lithium Gets Most of the Press, Cobalt Should be a Major Beneficiary of Electric Vehicle Adoption, Setting the Stage for Yet Another Structural Shift for the Metal

Current prices for cobalt are around $35,000/t. Prices have generally moved up with demand over the past 30 years but have shown volatility due to supply risks in major cobalt producing countries. Just as the China demand story sent cobalt prices soaring 300-1000%, global adoption of electric vehicles should create a similar pricing environment.

Cobalt cathode chemistry is the product of choice for applications requiring thin, flexible and high energy density batteries (e.g.. Li-ion batteries). According to data compiled by Navigant Research, electric vehicles have the potential to more than double cobalt demand over the next 20 years. Already, demand for rechargeable batteries in laptop computers, tablets, mobile phones and other portable electronics have been major drivers of global cobalt consumption over the past decade. Electric vehicles should provide the next leg of this long-term growth story.

Business intelligence firm CRU Group believes that the current global cobalt surplus will be quickly eaten up and the market will be in a deficit by 2017. The firm's senior consultant Panos Kotseras wrote in a report issued in December, "The cobalt market is expected to become tight due to a combination of robust demand and absence of a concrete project pipeline."

As One of the Major Global Producers of Cobalt, Sherritt International Has Significant Upside

Sherritt International (OTCPK:SHERF) has two major JV's that product cobalt: their Moa JV and their Ambatovy JV. Sherritt has a 50/50 partnership with General Nickel Company S.A. of Cuba (the Moa Joint Venture) and a 40% indirect interest in two companies (together the Ambatovy Joint Venture) that own a significant nickel operation in Madagascar. Both of these JV's produce Cobalt as a by-product of Nickel mining.

As mentioned, cobalt demand is expected to almost triple over the next 20 years, with electric vehicles supplying ~50% of demand by 2035 from a nearly 0% base. Should prices readjust to reflect this demand shift (as cobalt prices have historically done), the additional EBITDA generation would be exceptionally meaningful for Sherritt.

A reversion of cobalt prices back to their historical highs would add an additional ~$75m in EBITDA assuming flat production volumes. At it's current valuation (6.3x Adjusted EBITDA), this would imply roughly 74% upside from an increase in cobalt prices due to rapidly growing demand.This however may underestimate the true share price appreciation potential of another dramatic rise in cobalt prices. Over the last period of rapidly rising prices (2002-2007), Sherritt's share price rose ~400%. Given that the Electric Vehicle story should be less volatile than fluctuating Chinese demand, this impending growth driver for cobalt could provide a more stable demand floor with similar price action upside.

With the collapse in cobalt prices stemming from the financial crisis, now may be an extremely attractive time to enter an investment with long-term secular growth drivers at a depressed valuation.

To read the full article please click here to visit SeekingAlpha.com

 
 February 02, 2015
Simon Moores: Expect Supply Chain Focus for Megafactory Metals
    Publisher: Cobalt Investing News
    Author: Charlotte McLeod

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -

Simon Moores: Expect Supply Chain Focus for Megafactory Metals

Simon Moores of Benchmark Mineral Intelligence is a fixture on the graphite scene, and also comments frequently on the cobalt and lithium spaces. Resource Investing News was lucky enough to catch him at Cambridge House International's 2015 Vancouver Resource Investment Conference to get an update on all three commodities.

He commented on whether he sees low oil and gas prices impacting the electric vehicle market, also touching on the likelihood of Tesla Motors (NASDAQ:TSLA) using natural graphite at its soon-to-be-constructed gigafactory. "Whilst natural graphite has cost advantages and has a lower carbon footprint to the synthetic material, at the end of the day they need to get the raw material first and foremost, and if there isn't enough supply at the right price, then Tesla will have to use synthetic," he said.

In closing, he touched on what investors can expect from graphite, lithium and cobalt in 2015. "What I would expect is more focus on the supply chain situation," he said, noting that the emergence of battery megafactories will put pressure on supply of the metals. "Whether that will turn into investment for these companies is another question --- usually people are sluggish to react. Investors, the buyers of minerals, they only react when they see a specific problem, and they generally don't react before that problem."

To read the full article please click here to visit CobaltInvestingNews.com

 
 January 19, 2015
Stocks to Watch: Formation Metals Inc, Hudsons Bay Co, Essential Energy Services Ltd.
    Publisher: Winston View
    Author: Jarad Winslet

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




WinstonView.com - January 19, 2015

Excerpt from WinstonView.com

Stocks to Watch: Formation Metals Inc , Hudsons Bay Co , Essential Energy Services Ltd

Formation Metals Inc. (TSE:FCO) ended the trading session with a gain of 5.0000% or 0.005 points. After commencing the session at 0.105, the stock maintained a fairly thin range. During the quiet session, the stock hit 0.105 on the upside and 0.095 on the downside before culminating at 0.105. The total number of shares traded stood at 143,597. The previous close of the shares was registered at 0.1. The 52-week high of the share price is 0.27 and the 52-week low of the stock is 0.07. A difference of 61.11% from the 52-week high suggests that bulls would have to work hard to take the price to new highs. The trading currency is in CAD.

Hudsons Bay Co (TSE:HBC) suffered a minor setback as the shares lost 1.03% or 0.25 points. During the trading session, the price hit a ceiling of 24.26 and took support from the floor value of 23.87. In this session of profit booking, the shares closed at 24 with the number of shares traded hitting 141,844. The counter has a 52-week high of 25.38 and the yearly floor price, i.e. the 52-week low is 15.53. The company has a 30-day simple moving average of 23.99 and the 60-day simple moving average is registered at 22.24, according to the most recent information available. The trading currency is in CAD.

To read more, Sign up for a Free Trial - Winstonview.com

 
 January 13, 2015
Cobalt Shortage Put Brakes on Electric Car
    Publisher: Wall Street Daily
    Author: Tim Maverick

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




Wallstreetdaily.com - January 13, 2015

Cobalt Shortage Put Brakes on Electric Car

Wall Street is climbing aboard the electric car bandwagon. It's being encouraged by investment banks like UBS, Citigroup, and Deutsche Bank, all of which have put out glowing reports in recent months about the future of electric cars.

The Deutsche Bank report, for example, said that electric vehicle sales (including hybrids) would hit 9% of total vehicle sales in 2020 and 14% in 2025. In 2014, such vehicles represented about 4% of total sales.

One key driver to that rosy future, the bank said, would be the release of the Tesla Motors (TSLA) Model III. This vehicle will be a mass market model that will use low-cost batteries produced by Tesla's Gigafactory, which is currently under construction in Nevada.

When that happens, global production of these batteries will nearly double. And all of these batteries will need lots of lithium, graphite, and cobalt. I examined the supply situation for lithium and graphite in prior articles, so it's time to examine cobalt.

Supply-Demand Cobalt Blues

About 40% of current cobalt demand comes from the battery industry for products such as smartphones, laptops, and of course electric cars. According to Simon Moores of Benchmark Mineral Intelligence, cobalt demand from the battery industry alone could rise 17% from 2013 levels. That would be about 7,000 metric tons more per year.

In addition, Cobalt Investing News quotes Fortune Minerals (FT.TO) CEO Robin Goad as saying the next biggest use of the metal (at 19%) is for superalloys like those used in jet engines and wind turbines. And both of those markets are growing rapidly, too.

Because of the nature of cobalt, it's normally harvested as the by-product of mining for other metals, such as copper or nickel. In fact, 55% of cobalt production comes from nickel ores and another 35% from copper ores. But because cobalt is so closely tied with those metals, if mining for nickel or copper drops, so will cobalt production.

The world's leader in cobalt production is the strife-torn Democratic Republic of the Congo. It supplies about 55% to 60% of the world's cobalt. The two biggest miners of cobalt there are Freeport McMoRan (FCX) and Lundin Mining (LUN.TO).

Roughly 43% of cobalt refining is located in China. But U.S.-based OM Group (OMG) sold its refining business there in 2013 to Freeport, Lundin, and the Congo's stated-owned metals and minerals trading company.

Any problems in the Congo and China will definitely affect the players building battery mega-factories, namely LG Chem and Foxconn Technology.

Even if things go smoothly, the business intelligence firm CRU Group says that the global cobalt surplus is quickly being eaten up and the market will be in a deficit by 2017. The firm's senior consultant Panos Kotseras wrote in a report issued in December, "The cobalt market is expected to become tight due to a combination of robust demand and absence of a concrete project pipeline."

As the cobalt environment changes, so will the battery market.

Where Will Tesla's Cobalt Come From?

Tesla has already planned to get around overseas supply hitches by stating that it wants to source all of its raw materials from North America. But therein lies a potential problem...

The U.S. Geological Survey put 2013 cobalt production in the United States at only 6,500 tons and Canada at just 8,000 tons.

And 2017 -- the year CRU predicted there would be a global cobalt shortage -- is around the time that the Gigafactory is supposed to kick into production. Most of the miners interested in expanding North American cobalt output are junior mining companies that have been under tremendous financial pressure due to investors and Wall Street banks' aversion to mining endeavors. Nearly all of the major banks hear the words "mining" and will walk away from making any loans, no matter how rich the deposit.

This makes it questionable as to whether many North American junior producers will even be around in 2017 to meet Tesla's needs.

This realization is already having an effect on the price of cobalt.

Cobalt Prices Speeding Up

In its latest cobalt outlook, CRU points out that strengthening fundamentals in 2014 led to the first annual price increase since 2010. More price rises in the months ahead seem to be baked into the cake.

But investing directly in the cobalt market in North America is tough to do safely since, as I mentioned, most of the companies involved in cobalt are so small.

But that isn't stopping some companies from trying to capitalize on the coming rise in demand.

One example of a small company looking to feed Tesla's hunger for cobalt is Formation Metals (FCO.TO). It's looking to exploit the Idaho Cobalt Project, a primary source of high-purity cobalt in Idaho that was mined from the 1900s to the 1970s.

A larger company mining cobalt in North America is Vale S.A. ADR (VALE) through its Inco nickel subsidiary. This could also be another option as a large company would not be as vulnerable.

If an investor wishes to dip a toe into the market, I would suggest you do your due diligence on any of the speculative cobalt miners, like Formation, since the risk is high.

And "the chase" continues,

Tim Maverick

To read more on the : Wallstreetdaily.com website

 
 January 07, 2015
Cobalt prices strengthen as year-end pressure to sell subsides
    Publisher: MetalBulletin
    Author: Fleur Ritzema

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




MetalBulletin.com - January 7, 2015

Excerpt from the MetalBulletin Article

Cobalt prices strengthen as year-end pressure to sell subsides

Cobalt prices began 2015 on a stronger note, recovering slightly from a Christmas dip which had resulted from year-end producer pressure to sell.

Low-grade cobalt rose to $13.90-14.75 per lb on January 7, from $13.90-14.50 per lb previously. High-grade prices climbed to $14-14.85 from $13.90-14.70 at the end of 2014. Most saw the price dip at the end of last year as a sign of temporary sales pressure. Trading volumes remained low, but prices were higher in general than those seen at the very end of 2014... ...Meanwhile, the market continues to mull the impact of potential supply threats in 2015 such as ENRC possibly stopping production at Chambishi over issues of unpaid tax refunds in Zambia, as well as the anticipated ban this month on exports of DRC concentrates. An update on this ban being implemented or delayed has yet to be announced.

To read more, Sign up for a Free Trial Metal Bulletin Membership or follow on Twitter @metalbulletin

 
 December 19, 2014
Low-grade cobalt price hits its highest level since October
    Publisher: MetalBulletin
    Author: Fleur Ritzema

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




MetalBulletin.com - December 19, 2014

Excerpt from the MetalBulletin Article

Low-grade cobalt price hits its highest level since October

Low-grade cobalt prices continued to climb this week, hitting an eleven-week high on Friday December 19.

The low-grade low jumped 20 cents from the Wednesday December 17 level to put the range at $14-14.50 per lb, marking the first time since the start of October that the whole market has been trading above $14... The higher numbers were attributed to positive end-user sentiment and strong demand expectations for 2015, as opposed to a pick-up in spot metal demand.

To read more, Sign up for a Free Trial Metal Bulletin Membership or follow on Twitter @metalbulletin

 
 December 12, 2014
Cobalt Price Rally Continues After Chambishi Halts Spot Sales
    Publisher: MetalBulletin
    Author: Fleur Ritzema

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




MetalBulletin.com - December 12, 2014

Excerpt from the MetalBulletin Article

Cobalt Price Rally Continues After Chambishi Halts Spot Sales

Cobalt prices continued to climb this week, driven up by the news that major producer ENRC is not offering on a spot basis.

Prices have risen steadily in recent weeks and news of ENRC's absence from the spot market supported prices, which had already been rising due to expectations of tightening supplies in the long-term.

"The Chambishi aftershock continues, a lot of traders are trying to get long, so there have been a lot of trade enquiries," one producer said.

Another quoted "This is a proper bull run, hold onto your hat!"

To read more, Sign up for a Free Trial Metal Bulletin Membership or follow on Twitter @metalbulletin

 
 December 08, 2014
Chinese cobalt prices edge up amid growing sales volumes
    Publisher: Metal Bulletin
    Author: Fleur Ritzema

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -




MetalBulletin.com - December 8, 2014

Excerpt from the MetalBulletin Article

Chinese cobalt prices edge up amid growing sales volumes

China's cobalt prices inched up last week amid rising sales volumes, as market participants decided the minor metal has neared its trough.

Prices have risen on the increase in sales volumes, sources said.

"Some are feeling that domestic cobalt prices may have neared bottom, and those with cash in hand are therefore buying," a major producer official said.

Some end-users were also buying at the current low prices, the producer official said.

Rises in global cobalt prices on Wednesday have boosted local cobalt prices...

To read more, Sign up for a Free Trial Metal Bulletin Membership or follow on Twitter @metalbulletin

 
 November 24, 2014
Construction at Tesla's Gigafactory Ahead of Schedule
    Publisher: Cobalt Investing News
    Author: Charlotte McLeod

 
THIS IS NOT AN OFFICIAL COMPANY NEWS RELEASE
- FOR THE INFORMATION OF SHAREHOLDERS AND INTERESTED PARTIES ONLY -

Construction at Tesla's Gigafactory Ahead of Schedule

Graphite, Lithium and cobalt market participants have been keeping an eye on Tesla Motors since early this year, when the company announced plans to build a $5-billion lithium-ion battery gigafactory in the United States.

Since then, the maker of electric cars has moved fast. It announced a location for the gigafactory back in September and since then has been making quick progress at constructing it.

Case in point: analyst Simon Moores said Monday via his Benchmark Mineral Intelligence newsletter that construction of the gigafactory is "up to one year ahead of schedule as preparation for the site continued in Q4 2014 at an accelerated pace."

He also states that Tesla plans to use the gigafactory to provide not only electric vehicle batteries, but also "stationary storage applications to store the intermittent energy generated from wind and solar sources."

However, what's perhaps most interesting for market participants is Moores' comment that Tesla, which has already partnered with Panasonic on the gigafactory, is close to announcing other partners. Moores quotes Tesla as saying, "additional Gigafactory partners will be finalised shortly to create a fully integrated industrial complex."

The prospect of more partners has excited market watchers, but as Moores notes, those partners may or may not be raw materials suppliers --- in other words, companies that will provide the graphite, lithium and cobalt that the gigafactory will require. Indeed, in his opinion "agreements with mineral and metal companies should not be expected until well into 2015."

That said, Moores is concerned that even given that time frame, Tesla may ultimately have trouble getting the materials it needs. "What Tesla is asking the world to do is to more than double the output of battery raw materials in a fraction of the time it would normally take to develop and at huge risk to suppliers," he explains.

Definitely some food for thought as the gigafactory hurtles toward completion.

BMW Alliance?

As if the above news wasn't enough, Tesla was also making headlines Monday on rumors of a possible alliance with Germany's BMW.

Reuters reported over the weekend that Tesla CEO Elon Musk told German publication Der Spiegel that his company is speaking with BMW "about whether we can collaborate in battery technology or charging stations." He also described BMW's production of carbon-fiber-reinforced car body parts as "interesting" and "relatively cost efficient."

While no other details were provided --- and BMW has not commented --- the news outlet notes that back in June executives from the two companies met to discuss "the creation of charging stations usable or different types of electric cars."

Finally, Musk told the publication that he sees Tesla establishing another battery production plant in Germany in five or six years. While there's been no word yet about demand implications, it's certainly possible that they could be dramatic given current speculation about how much graphite, lithium and cobalt the Nevada gigafactory will require.

To read the full article please click here to visit CobaltInvestingNews.com

 
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