Your browser does not support script
Formation Metals Inc. Formation Metals Inc.

Cobalt News

Formation Metals Inc.

Investor Info

Show printable version of 'Cobalt News' item in a New Window


Please note that by clicking on any of the links provided below you will be entering websites directly or indirectly maintained by a third party and that you do so at your own risk. The link to the External Websites are provided for convenience purposes only. By clicking the links below you acknowledge and agree that Formation Metals Inc. is not responsible for, and hence does not accept or assume any responsibility or liability whatsoever with regard to the content, or the operation of, the External Website and/or any linked sites.

 August 10, 2015
Thinking Outside the Commodity Box: Benchmark's Investment Primer for Lithium, Cobalt and Graphite
    Publisher: Streetwise Reports - The Gold Report
    Author: Brian Sylvester


It's often difficult to understand the global markets for critical minerals so The Gold Report narrowed it to three---lithium, cobalt and graphite---and brought in Simon Moores, managing director of London-based Benchmark Mineral Intelligence, and the firm's analyst, Andrew Miller, to provide insight into minerals that they say need to shed their labels as traditional commodities and embrace their future as niche, raw-material solutions for a growing list of technology manufacturers. As Benchmark prepares to embark on its World Tour, Moores and Miller discuss supply chain visibility and the impact of disruptive technologies on these markets, as well as companies seeking to leverage lithium, cobalt and graphite into investable business models that will lure investors with a long-term outlook.

The Gold Report: In a recent Benchmark Mineral Intelligence report, "Mineral Supply Chain Visibility: Impact of Disruptive Technologies on Critical Raw Materials," you make the case that supply chain visibility will become increasingly important in the critical minerals space. Please briefly explain why.

Simon Moores: We've noticed that during the rare earth element bubble in 2010--2011, people didn't know what these niche minerals that go into everyday critical technologies were or where they were sourced. We've seen that knowledge grow in the last five years and downstream companies like Apple Inc. (AAPL:NASDAQ) and Tesla Motors Inc. (TSLA:NASDAQ) are now aware of what the raw materials are and where they come from.

Awareness in these niche minerals of growing importance, such as graphite, lithium and cobalt, is now occurring throughout the supply chain and not just in the upstream portion with the mining or processing companies. The downstream companies are paying attention and they buy the raw materials to manufacture these disruptive technologies. Supply chain visibility is rising.

Andrew Miller: Supply chains are going to become increasingly important. As these new technologies rapidly develop, both traditional industrial end users and newer high-tech buyers of these raw materials need to know more about the global supply pattern---factors that can impact their business. It's basic risk management in today's world.

They can't just rely on their traders or distributors for intelligence. End users are now aware of the need for a more global, independent picture on supply, demand and prices.

TGR: Is that happening?

SM: We haven't seen companies completely change their raw materials buying patterns yet, but some are preparing for it. In the U.S., the Conflict Minerals Act was the first time specific political restrictions have been put in place for these minerals in the West for ethical reasons. Europe will introduce similar legislation early next year.

The industry will have to start thinking about buying from reputable suppliers that meet certain standards. That means that end users may no longer opt for the lowest-cost source of raw materials from places like China and Democratic Republic of the Congo (DRC) if producers in these regions don't fall in line with environmental or ethical rules. And that is key. It's not just about price anymore. It means people will start paying a premium for more ethically sourced raw materials.

TGR: In the same Benchmark report you suggest that disruptive technologies are the most important new market for critical minerals. What are disruptive technologies and what are two or three specific ways these technologies are changing the markets for critical minerals?

AM: Disruptive technologies are completely new markets that are creating new value chains, products such as smartphones, electric vehicles and different types of energy storage. Growth in these new markets are affecting not only their own supply chains, but also those of existing industrial markets that rely on the same raw materials.

In the longer term there will be a real need for new critical mineral supply to come onto the market. In many cases that's also going to require suppliers to become more flexible. It's not just the production out of the ground that's going to have to increase; the refining and processing capabilities have to improve and expand too. The material required by traditional critical minerals markets is quite different and more tailored from the majority of product that is needed in these new high-tech spaces.

TGR: So companies developing these critical minerals projects not only have to get these elements out of the ground, but then they also have to process them in such a way to meet the specific requirements of these new end users, which can vary greatly.

SM: That's right. The grades that the critical minerals sector has traditionally served up and that have become industry standards over the past few decades are now changing, and that's why critical minerals like lithium, cobalt and graphite aren't really commodities. They can't be mined out of the ground in large volumes and directly used; they are tailored specifically for the end user.

With commodities it is more of a logistics game, with critical minerals is a processing game---this is where they are fundamentally different.

TGR: And that is often without any firm commitment from the end users. Is the traditional offtake deal dead in the critical minerals market, at least in specific cases?

SM: Offtake deals are familiar financing methods for resource companies, but it's difficult to apply that model to these minerals, which are specialist products. Critical minerals are not usually traded in the volumes that offtake contracts often serve, like, for example, iron ore. If these markets grow to reach huge volumes in the future, perhaps then they will be traded in the same way as large-scale commodities.

Excerpt from Article on Cobalt

TGR: Cobalt is a component in lithium-ion cathode for batteries. Tell us about the cobalt market.

AM: Cobalt is similar to the lithium market in the sense that you have one or two large producers that dominate supply. The DRC is where the majority of the raw material is produced. Outside of the DRC, cobalt is produced in a number of countries, but all of that production is limited and there's little capacity for short-term expansion. The key issue with cobalt is security of supply, particularly with the increased demand from the battery sector. Over the past five years or so, cobalt demand from the battery sector has increased threefold, and 2014 battery demand made up 45--50% of the total market.

TGR: Cobalt prices have slipped some over the summer. Is that the beginning of a downturn in cobalt prices or a summer dip?

AM: It is more of a short-term trend than anything. When we look at the macro dynamics for the cobalt market, supply is tightening. In H2/15 and certainly into next year we're going to see the market move into deficit, and that will obviously prompt rising prices.

TGR: What are some companies that are developing cobalt projects?

AM: There are some companies in North America where there is an obvious need for alternative resources. We follow companies like Fortune Minerals Ltd. (FT:TSX), which is advancing the NICO gold-cobalt-bismuth-copper project in Canada's Northwest Territories, Formation Metals Inc. (FCO:TSX), which owns the Idaho cobalt project near Salmon, Idaho, and Global Cobalt Corp. (GCO:TSX.V).

Unlike lithium and graphite, there is a lack of new exploration for cobalt resources - which tend to be an associated mineral rather than a primary target. This could be a problem for the industry in the future.

TGR: How far away is Formation from producing a product end users can get a closer look at?

AM: There's no new supply expected in the market over the next 12 months or so. These companies are trying to raise investment capital to further develop their projects. It will take time and may take further price shocks to get the attention of investors.

Excerpt from Article on Benchmark Minerals World Tour starting in London on Sept. 11

TGR: You're about to embark on the Benchmark Mineral Intelligence World Tour. Tell us about it.

SM: We will offer a series of free seminars that examine the battery supply chain and the raw materials that fuel it. We start our World Tour in London on Sept. 11 and continue in New York, Toronto, Vancouver, Hong Kong, Tokyo, Sydney and Melbourne. These are the world's mining investment hubs and places that have shown interest in the battery supply chain. People can find more information by visiting Benchmark Minerals and clicking the World Tour tab.

TGR: Please share one tidbit for investors to keep in mind as they conduct their due diligence on critical minerals equities.

SM: Don't treat critical minerals like commodities. The basic process of analyzing commodities has relevance to specialist minerals but they're not entirely the same. Critical minerals are niche products at this stage that require a long-term outlook. It is no surprise that the people that invested in the critical minerals supply chain in the past---namely Japanese and Korean companies---are long-term thinkers. These companies now control the majority of these supply chains. A longer-term way of thinking is crucial.

TGR: Thank you for talking with us today, Simon and Andrew.

Simon Moores is managing director of Benchmark Mineral Intelligence, an online publishing and consultancy business specializing in critical minerals and metals, disruptive technology and emerging markets. Moores has also worked as a business journalist focusing on non-metallic minerals such as lithium, graphite, rare earths, potash, TiO2 pigment and feedstocks such as rutile and ilmenite.

Andrew Miller is an analyst at Benchmark Mineral Intelligence and specializes in the first-hand data collection of niche minerals and metals, especially graphite, lithium, cobalt and fluorspar. Miller's primary role at Benchmark is price collection for these industries and creating and maintaining indices including Benchmark's new Graphite Price Index.

To read the full interview on the Gold Report website please click here

 July 21, 2015
Cobalt's Hi-Tech Blueprint
    Publisher: Benchmark Minerals
    Author: Andrew Miller


Benchmark Magazine has published issue #2 as a complimentary download:
Europe's Conflict Crackdown & Cobalt's Techtonic Shift

The quarterly publication is part of an annual Membership that specialises in critical minerals and metals, disruptive technology and emerging markets.

Excerpt from the Magazine

During the past five years, the battery sector's hunger for cobalt has increased three-fold and prices have reacted in a volatile way. New battery megafactories using cobalt-based cathodes are being built, yet the industry is still divided on how far lithium-ion batteries can really go. With these emerging hi-tech markets threatening to unbalance an industry that relies on the Democratic Republic of Congo for over half of its raw material, the need for new supply is rising. In this excerpt from Benchmark Mineral Intelligence, "Europe's Conflict Crackdown", Andrew Miller investigates cobalt's techtonic shift sending cobalt critical due to the rise in the demand for lithium ion batteries and whether the industry can handle another price shock that could potentially derail its role in the lithium-ion revolution.

Formation Metals Inc. Idaho Cobalt Project is mentioned in the 8 page article, "Cobalt's Hi-Tech Bluebrint" (page 5 in the link to the article below).

Editorial - Cobalt's Hi-Tech Blueprint

For queries and further information please contact: or
 June 23, 2015
Annual General Meeting - Thursday, June 25, 2015
    Publisher: Formation Metals

- You Are Invited -

Management of Formation Metals extends this
invitation for you to attend the Company's

2015 Annual General Meeting

11:00 am, Thursday, June 25, 2015
The Vancouver Club (SFU Room)
915 West Hastings St.,
Vancouver, B.C.

After the formal business meeting has concluded,
Paul Farquharson, President and CEO,
will be giving a corporate update and presentation.

Please join us this coming Thursday,
June 25th at 11:00 am.

If you would like further information please contact us.
 June 11, 2015
Why Banks, Trading Houses and Funds Have Set Their Sights on Cobalt
    Publisher: Metalbulletin
    Author: Fleur Ritzema

Excerpts from the MetalBulletin Article

Why Banks, Trading Houses and Funds Have Set Their Sights on Cobalt

At a time when metals are failing to attract considerable outsider attention, investor interest in cobalt is showing early signs of a pick-up.

Banks, trading houses and hedge funds are among the entities showing a fresh interest in cobalt, even as the blue metal struggles to stage a meaningful price recovery.

Here, Metal Bulletin explores what's behind the growing interest in the minor metal and considers whether it's justified.

Among the fresh interest is that from investors, looking to secure material in the hope that prices will rise in the long-term. One US fund was understood to be seeking around 100 tonnes of metal at the recent Cobalt Development Institute (CDI) Conference in Toronto.

And seasoned minor metal traders, like Wogen, who had been largely absent from the cobalt market in recent years, are also believed to be once again eyeing up the blue metal.

Banks, including BTG Pactual, which contrary to the trend among many banks, has been aggressively expanding in commodities, are throwing their hats into the ring too. The Brazilian bank has hired two big name cobalt veterans: ENRC's Tony Southgate and ex-Glencore trader Isaac Levy, and is already understood to be offering large volumes of metal on the spot market.

The heightened interest comes despite prices lingering in the low-$13s per lb, and showing little signs of any significant rally since dropping from the low $20s in 2010.

So just what is driving the sudden interest from both traditional and non-traditional sources?

The Tesla factor...

According to research by Macquarie, Tesla alone may require up to 10,000 tpy of cobalt, which accounts for around 10% of the current global market. Others peg the figure at closer to 7,000 tonnes. On top of this demand from Tesla, heightened demand from the rest of the battery sector, largely due to raised environmental standards, as well as from the aerospace sector, has left many bullish about cobalt's future.

...One trader who attended the CDI conference last month said, "I think a few companies are looking at cobalt more closely. There's a relatively new application in the form of huge growth in batteries. Tesla, smartphones, Panasonic, for instance. A lot of analysts can see it looks like a market that's set to tighten, which was clear from the presentations at the CDI"...

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

 May 29, 2015
President's Letter to Shareholders
    Publisher: Formation Metals Inc.


Formation Metals Inc. - President's Letter to Shareholders

May 29, 2015

Dear Fellow Shareholders,

In our last Letter to Shareholders we provided an overview of the 2015 fiscal year which focused on the many positive developments the Company had experienced throughout the year. As our 2015 Annual General Meeting on June 25th is fast approaching, we want to take this opportunity to provide our shareholders with a corporate development update as well as invite you to attend the meeting. Enclosed are the related meeting and voting proxy materials, please feel free to contact us if you have any questions. Your ownership in the Company is important, we encourage all our shareholders to vote.

It has been quite an exciting year for your Company. We are optimistic about the future of the cobalt markets and how a substantial increase in cobalt demand, particularly from the battery sector, could positively impact our Idaho Cobalt Project (ICP). Last month we announced positive economics in our Preliminary Economic Assessment (PEA) which is a significant milestone in the advancement of the ICP towards feasibility and production. We believe that the decision to shift from producing high purity cobalt metal to cobalt sulfate positions our Company and its shareholders to capitalize on the expanding battery sector.

Robust Economics and Revenue By-Products
The PEA's economic model resulted in a post-tax NPV of US$113.45M and an IRR of 24.07% using an 8.5% discount rate and 35% corporate tax rate. The report is based on an underground mine with a target production rate of 800 tons per day with a weighted average annual production of 2,771,000 lbs of cobalt, 4,533,000 lbs of copper and 3,600 oz of gold over a 12.5 year mine life with an estimated pre-production period of 21 months utilizing a 0.25% cobalt cut-off for stope design. Please visit our website to view the full SEDAR filed PEA Technical Report.

The PEA has demonstrated the ICP's diversified product potential. The base case revenue stream for all its products over the life of mine (LOM) is approximately US$983M of which the majority, US$690M, is attributed to cobalt sulfate. In addition to cobalt sulfate, the ICP will produce copper concentrate and gold metal with a value of approximately US$100M over LOM and a significant amount of saleable by-products for the agricultural industry, namely copper sulfate and magnesium sulfate. Over the LOM, the ICP will produce approximately US$140M worth of copper sulfate and approximately US$55M of magnesium sulfate. We are currently in the investigative stages of pursuing potential off-take agreements for all the ICP products.

The positive results of the PEA and recommendations from our independent engineering consultants have given our Company a clear mandate to move the ICP towards feasibility. The results from ongoing metallurgical test work suitable for a feasibility study are expected in our second fiscal quarter (August 31, 2015). Current quotes are being assessed for project advancement and marketing campaigns are being organized and scheduled.

2015 Cobalt Development Institute Conference (CDI)
We recently had the opportunity to present an update on the ICP to the members of the Cobalt Development Institute at the annual conference held this year in Toronto. The CDI conference is the only exclusive cobalt conference in the world and is always well-attended by world cobalt industry experts.

CDI Conference - Supply Deficit Looming Sooner than Later
A new cycle of undersupply in cobalt "is about to begin" (CRU consultant Peter Searle)
Our presentation was well received and there was much excitement about our new ICP product, cobalt sulfate heptahydrate and the potential for the ICP to be the only new, near term primary producer of cobalt in the United States. Conference presenters were almost unanimous on the potential for increasing cobalt prices due to the increased demand from the expanding battery sector (representing 42% of all cobalt consumed). Cobalt as a technology enabling metal, is critical in supporting the global innovation platform and the green agenda being followed by many countries and companies. Sentiment at the conference was upbeat with cobalt market experts predicting that the anticipated cobalt supply deficit will occur in 2016 as opposed to the previous estimate of 2017 (source: CDI 2015).

And it All Started Early Last Year...
As has been stated in numerous publications in particular, Benchmark Mineral Intelligence "The excitement in the battery sector escalated last year with Tesla Motors' announcement of building the world's largest battery factory, the "gigafactory".

The news sparked a revival of interest in companies supplying the raw materials for the lithium ion batteries such as cobalt, lithium and graphite as the gigafactory being built in Nevada has the potential to double the current world lithium ion battery production thereby doubling the demand for the raw materials required."

Since Tesla's announcement there has been an additional five new battery factories planned and under construction. This is expected to substantially increase the demand for raw materials such as cobalt which will drive the supply into deficit much sooner than the previously predicted 2017. As reported by Simon Moore of Benchmark Mineral Intelligence, "The lithium-ion battery megafactories are coming and they will require a substantial new supply of raw materials. While these megafactories will have more negotiating power in their contracts for industrial metal sourcing, they will not be able to create this supply out of thin air." As Mr. Moore states, "Tesla has already stated that they intend to source their raw materials as locally as possible whereas over half of the world's cobalt supply originates from the Democratic Republic of the Congo. This creates an interesting dynamic and playing field". A playing field we believe our company and our ICP is well positioned to participate in.

We believe we are in the midst of a "positive perfect storm".

We have no long term debt and we have a solid cash position.
We have a new team,
We have a new product and
We have a unique commodity which is in strong demand.

The ICP, being located in the western United States and proximal to the Gigafactory, offers a unique potential supply of ethically sourced and environmentally sound cobalt for US consumers.

If you would like further information or wish to sign up for email updates please contact us at 604-682-6229 ext. 228, or please email us at All 2015 AGM materials have been posted on our website.

This will be an exciting year ahead and on behalf of the management team at Formation Metals Inc., I want to thank you, our shareholders, for your continued support.

Signed "J. Paul Farquharson"

J. Paul Farquharson
President & C.E.O.

The ICP remains the sole, near term, fully environmentally permitted, primary cobalt deposit in the United States.

E.R. (Rick) Honsinger, P.Geo., Vice President of the Company, is the Qualified Person as defined by National Instrument 43-101 who has supervised the preparation of this letter and has approved its contents.

The Company cautions that the PEA discussed in this letter is preliminary in nature, and is based on technical and economic assumptions which will be evaluated in further studies. The PEA is based on the current (as at March 10, 2015) ICP estimated resource model, which consists of material in both the measured/indicated and inferred classifications. Inferred mineral resources are considered too speculative geologically to have technical and economic considerations applied to them outside the scope of a PEA. The current basis of project information is not sufficient to convert the mineral resources to mineral reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability. Accordingly, there can be no certainty that the results estimated in the PEA will be realized. In addition, this letter contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Statements in this letter pertaining to projected revenues and cash flows, quantity and grade of mineralized materials, estimated mineral prices and the continued expansion of the market for battery grade cobalt chemicals are forward-looking statements. These forward-looking statements are based on assumptions and address future events and conditions and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. Many of the assumptions respecting projected revenue, cash flow and quantity of mineralized materials will be set out in detail in the Preliminary Economic Assessment. Such projections are and will inevitably always be dependent on assumptions about future mineral prices and development costs which will be subject to fluctuation due to global and local economic conditions. This letter also contains forward-looking statements respecting the growing demand for battery grade cobalt chemicals, which demand may or may not continue to grow depending on consumer habits and technological developments. Further information regarding risks and uncertainties which may cause results to differ from those contained in forward-looking statements are included in filings by the Company with securities regulatory authorities and are available at Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. The statements contained in this letter in regard to Formation Metals Inc. that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Formation Metals Inc.'s beliefs, expectations, hopes or intentions regarding the future. All forward-looking statements are made as of the date hereof and are based on information available to Formation Metals Inc. as of such date. It is important to note that actual outcome and the actual results could differ from those in such forward-looking statements. Factors that could cause actual results to differ materially include risks and uncertainties such as technological, legislative, corporate, commodity price and marketplace changes.

 May 25, 2015
The CDI Conference: What We Learned About the Cobalt Market
    Publisher: Metalbulletin
    Author: Linda Lin

Excerpts from the MetalBulletin Article

The CDI Conference: What We Learned About the Cobalt Market

Sentiment at the CDI conference this month was upbeat amid anticipated supply shortage. Here is a summary of what we learned.

  1. Most market participants expect higher cobalt prices before the end of this year. Major traders see prices at $13.5-15 per lb if Chambishi Metal resumes production at the end of June, and at $14-16 per lb if the closure lasts longer.
  2. Closure at Chambishi may last for "at least" three months and may last longer than expected, according to sources. Some market participants are predicting a permanent shutdown of the operation.
  3. China's cobalt metal imports have been low this year, with ENRC not supplying on long-term basis due to the closure at Chambishi. Ambatovy meanwhile is selling robust volumes around the world.
  4. Jinchuan Group is planning to reduce its cobalt metal output by around 16% to 3,200 tonnes this year, according to an official heading Jinchuan's nickel and cobalt operations.
  5. China's cobalt consumption is expected to rise by 13% to about 4,300 tonnes this year, according to an Antaike analyst.
  6. Battery makers in South Korea and Japan have both reported solid demand from the automobile sector, with one Japanese major company expecting a surge of 70% for battery demand in the next two years.
  7. To read more and see the full list of 10 items learned at the 2015 CDI Conference, Sign up for a Free Trial Metal Bulletin Membership or follow on Twitter @metalbulletin

 May 21, 2015
Cobalt is About to See New Cycle of Shortage
    Publisher: Metalbulletin
    Author: Linda Lin

Excerpts from the MetalBulletin Article

CDI Conference: Cobalt is about to see a new cycle of shortage, CRU says

A new cycle of undersupply in cobalt "is about to begin", thanks to steady growth in the battery sector, according to CRU

"Demand [for cobalt] especially from rechargeable batteries and super alloys will continue to be robust in the medium term. Meanwhile, supply growth will plateau as recently commissioned copper and nickel operations reach capacity," CRU consultant Peter Searle told delegates at annual conference of CDI in Toronto this week.

As a result, cobalt prices are expected to reach "$20 per lb level" by the 2020s, according to Searle, as he predicted the cobalt market turns to deficit from surplus from around 2016 onward.

Cobalt demand has been growing and is expected to grow at more than 5% per year, mostly owing to contribution from the chemical sector, during the period of 2000-2025.

Among main consumers, battery currently accounts for about 43% of global cobalt consumption in 2015, compared with a ratio of 26% in 2006, according to Searle.

Meanwhile, growth in mine production is projected to slow down to nearly zero around 2019, in contrast with a growth of as high as nearly 40% seen in 2010, he said.

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

 May 07, 2015
Tesla Batteries Already 'Sold Out' Through Mid-2016
    Publisher: Cobalt Investing News
    Author: Theresa Matich


Tesla Batteries Already 'Sold Out' Through Mid-2016

During Tesla Motors' (NASDAQ:TSLA) first-quarter conference call on Wednesday, there was still plenty of excitement over the company's recent announcement of its new suite of rechargeable batteries.

While the electric vehicle manufacturer put out 11,160 vehicles in Q1 to beat its guidance by 10 percent, Tesla's new battery business was also a big focus for many who asked questions on the call.

CEO Elon Musk stated that response to the battery announcement has been "crazy off the hook," with 38,000 reservations for the Powerwall and 2,500 reservations for the higher-capacity Powerpack. Since Powerpacks are meant to be used by utilities or for heavy industrial uses, Musk noted that each reservation is likely for at least 10 units, while those reserving Powerwalls have probably been asking for more than one unit as well.

"There's no way that we can possibly satisfy this demand this year," Musk said. "We're basically sold out through the middle of next year, in the first week."

While there was still plenty of talk over Tesla's financial performance and the rollout of its new Model X vehicles, Tesla Energy has certainly stolen the spotlight for now. Here are a few more highlights from Wednesday's call:

  • Increasing capacity? --- "Given the very high demand that we're seeing for Tesla Energy products, we're actually trying to figure out if we can go from our current production target ... in our Nevada plant to maybe 50 percent more than that, or even higher," Musk said. "The sheer volume of demand here is just staggering. We could easily have the entire gigafactory just do stationary storage."
  • Enter manganese --- While many expect Tesla to use a NCA (nickel-cobalt-aluminum oxide) cathode in its new suite of batteries, that won't necessarily be the case. Musk noted that there are two distinct applications for the batteries --- backup power and daily cycling --- each of which have very different chemistries. "The backup-power chemistry is quite similar to the car, which is like a nickel-cobalt-aluminum cathode. The daily cycling ... is nickel-manganese-cobalt, so there's quite a lot of manganese in there."
  • SolarCity (NASDAQ:SCTY) rejection --- SolarCity has said that it will not use the 7-kilowatt-hour Powerwall model, which is optimized for daily cycling, and Musk agrees that using the battery would be more expensive than utilities in the US, at least in most cases. However, he added that the battery makes more sense in other regions, such as Europe.
  • Apple (NASDAQ:AAPL) --- Another interesting point that's gained traction is Musk's response to questions about Apple entering the electric vehicle business. The CEO stated that he would welcome Apple's participation in the sector, but when asked whether he is worried about engineers at Tesla being poached by Apple, said he isn't worried. In fact, he suggested Tesla has recruited something like five times the amount of people from Apple as Apple has taken from Tesla within the past year or so.
  • To read the full article please click here to visit

 May 03, 2015
What Does the Tesla Battery Announcement Mean for Lithium, Graphite and Cobalt?
    Publisher: Cobalt Investing News
    Author: Theresa Matich


Simon Moores: What Does the Tesla Battery Announcement Mean for Lithium, Graphite and Cobalt?

Last Thursday night, Tesla Motors (NASDAQ:TSLA) announced the details of its new line of residential and business-scale rechargeable batteries under the banner Tesla Energy, marking a massive shift for the company.

True to form, Tesla CEO Elon Musk has set a lofty goal with regards to the batteries. He shared his hopes that Tesla's line and others like it will help the world shift away from fossil fuels by facilitating the storage of energy generated from sources like wind and solar.

However, there wasn't much talk about supply-chain specifics --- i.e., how much lithium, graphite and cobalt will be needed for all those batteries. With that in mind, Resource Investing News got in touch with Simon Moores of Benchmark Mineral Intelligence to talk about how Tesla's new batteries may affect the markets for those metals.

A nice surprise

For Moores, the biggest surprise from Thursday night's announcement was the cost of the batteries. He noted that the cost of Tesla's home-use battery, the Powerwall, was expected to come in at over $10,000. That's well above the actual cost of the battery, which is set at $3,000 for the 7kWh model and $3,500 for the 10kWh model.

In the same vein, Moores said that the second thing that stood out was the scalability of the battery systems. "That was really clever from Tesla ... they're making it really easy," he said.

Of course, the $3,500 price tag will still be a price barrier for many, a point conceded by Peter Rive, CTO of SolarCity (NASDAQ:SCTY). "I don't believe this product in its first incarnation will be interesting to the average person," he told the Associated Press.

Still, Moores stated that Tesla has done a good job of addressing that issue. "I think there's always a barrier there because it's such a new thing. Not a new technology, but a new concept ... so people have nothing to compare it to," he said. "The cost is very low still. I think Tesla really got in aggressively on the price in order to start immediate adoption."

No word yet on pricing for Tesla's higher-capacity 100kWh Powerpack batteries, which were also announced on Thursday.

Lithium, graphite and cobalt needed

Of course, the question on every critical metals investor's mind is "how much lithium, graphite and cobalt will the batteries use?" According to estimates from Benchmark Mineral Intelligence, the answer is "a lot." "Tesla hasn't 100 percent confirmed they're the same batteries used in their cars, but they pretty much are," Moores said, "so they will contain a lithium and cobalt cathode --- a NCA (nickel-cobalt-aluminum oxide) cathode --- and graphite as well."

Benchmark expects that to produce each Powerwall, 16 kilograms of synthetic graphite (or 16 kilograms of spherical graphite derived from 40 kilograms of flake graphite concentrate), as well as 12 kilograms of lithium hydroxide, will be required. For the Powerpacks, Moores said those amounts will increase 10 times (about 160 kilograms of graphite and 120 kilograms of lithium). In other words, they'll need slightly more than the amounts of lithium and graphite currently used in Tesla's Model S.

Given those numbers, if demand for the batteries takes off as Musk expects, it could mean big things for critical metals demand. Moores said that while there are enough raw materials in the ground to support Tesla's battery revolution, the key question will be whether there's enough processing capacity and know-how to make battery-grade products.

"The battery-grade products are specialist products. They're not commodities," he pointed out. "There's a lot of expertise that goes into processing these raw materials before they can be used in batteries, and the question is, where does that reside?"

Currently, much of that processing capacity lies in China, Japan and South Korea. Still, Moores noted that China is still "fairly new to the lithium game" and that it still relies heavily on importing raw materials. "There is room in the lithium market," he said, especially for companies aiming to go beyond raw materials to create more specialized products.

Higher demand, higher prices

Increased demand will have implications for lithium, graphite and cobalt prices as well. "You've got increased demand from batteries, which we're already seeing, and that's without gigafactory demand. And more importantly, there's other megafactories being developed in China," Moores said. "When you have such a heavily skewed market on the demand side with little change on the supply side, prices are only going to go one way."

While that might sounds like good news, Moores argued that price volatility isn't actually good for the industry. It can prevent long-term planning and investment, leaving end users without supply and leading to substitutions in the market, as happened to some extent in the rare earths industry. However, Moores isn't worried that what happened with rare earths will happen with lithium, graphite or cobalt.

"There is potential for prices to go higher than they've ever been, but ... I think lithium ion is too far gone. It's too commercialized now," he said, speaking to the possibility of substitution in the near future. "Regardless of the bad news they might get now and again, for whatever reason, it's the most trusted form of battery. For that reason, it's here to stay for a long time, in my opinion."

What does it all mean for juniors?

Still, Tesla hasn't said much about supply agreements for lithium, graphite and cobalt. While Moores suspects the company may need stockpiles ready for its gigafactory by the end of this year, he suggested that Tesla could also continue to source its cells from Panasonic (TSE:6752). "They need to lock up the right volumes of raw materials, and I think they're not going to do a deal unless it's right for them," he said.

When asked whether lithium companies in Nevada will have an advantage in terms of securing supply agreements with Tesla, Moores said that they have an edge by virtue of being on the company's doorstep. However, he stressed that it's more important to consider whether such companies are able to economically produce the right grade of lithium. "The key word is economic, because Tesla is going to be negotiating hard on these contracts," he said. "They want the best deal."

Western Lithium (TSX:WLC), Pure Energy Minerals (TSXV:PE) and Dajin Resources (TSXV:DJI,OTCMKTS:DJIFF) are located in Nevada, along with Rockwood Lithium (now owned by Albemarle (NYSE:ALB)), which controls the only producing lithium operation in the US. Tesla has previously said that it plans to source all raw materials for its gigafactory from North America.

In any case, Tesla's announcement has certainly injected some fresh excitement into the critical metals space. Investors will be keeping an eye out for more developments from the company.

To read the full article please click here to visit

 April 20, 2015
Strength Remains in Cobalt Market on Anticipation of Supply-Driven Tightness
    Publisher: MetalBulletin
    Author: Fleur Ritzema

Excerpts from the MetalBulletin Article

Strength Remains in Cobalt Market on Anticipation of Supply-Driven Tightness

Strength remained in the cobalt market last week, as sellers set their sights higher on an anticipated shortfall due to Chambishi's absence from the spot market.

Sellers felt little pressure to offer aggressively last week, although buyer demand was flat towards the end of the week, sources said.

ENRC's Chambishi operation this month confirmed reports by Metal Bulletin that production of cobalt would stop for three months as a result of feed problems.

Chambishi is the world's biggest cobalt metal producer, selling large volumes of broken cathodes to Asia, the USA and Europe.

Over 1,000 tonnes of metal are expected to be affected by the temporary closure. But the rumour mill was in overdrive last week, as the market speculated about whether the stoppage would last longer than planned, after Tony Southgate, head of the ENRC's cobalt book, was understood to have resigned.

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

Previous All pages Next 1 2 3 Page 4 5 6 7 8 9
Download Adobe Acrobat Reader now! Adobe Acrobat Reader or Exchange is required to view PDF documents. You may download the free document viewer (Acrobat Reader) from Adobe's web site.
Adnet Communications Inc.