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 February 22, 2014
Tesla's future rides on a massive battery plant
    Publisher: CNN Money
    Author: Chris Isidore - February 22, 2014

Tesla's future rides on a massive battery plant

So far the story of Tesla Motors has been about exciting electric luxury cars and an even higher performing stock.

Next week it will reveal plans for a much less sexy innovation that is more important to the company's future than either of those things: A huge new lithium battery factory dubbed the "Gigafactory" by Tesla founder Elon Musk. The plant is the key Tesla needs in order to produce an "affordable" long-range electric car in substantial enough numbers to join the ranks of the major automakers.

Read the full article here: CNNMoney - Tesla's Future Rides on a Massive Battery Plant

 February 14, 2014
Cobalt prices strengthen on healthy aerospace, battery demand
    Publisher: Metal Bulletin


Cobalt prices strengthen on healthy aerospace, battery demand

Cobalt prices continued to climb this week on strengthening demand for alloys and batteries.

Low-grade cobalt prices reached $13.75-14.75 per lb on Friday February 14, up from $13.55-14.55 per lb on Wednesday February 12. High-grade cobalt prices hit $14-15 per lb, up from $13.95-14.90 per lb. The official London Metal Exchange cash cobalt price also climbed in the second half of the week, to reach...

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 February 12, 2014
Cobalt Market May See More Changes in 2014
    Publisher: Roskill Information Services

 PR Newswire

LONDON, February 12, 2014 /PRNewswire/

With 2013 behind us, the cobalt market will reflect on a year that saw minimal price movement despite a number of significant developments. New production capacity coming on stream in the Madagascar and the Philippines, Freeport Cobalt's acquisition of the Kokkola refinery, and a proposed ban on concentrate exports from the DRC and subsequent increase in export taxes did little to profoundly impact market prices which, despite modest increases over the summer months, ended the year at a similar level to which they started it.

What will 2014 and beyond hold?

What should we expect to happen in the DRC in 2014?

Given its position as the world's largest mine producer, developments in the DRC have the potential to significantly impact the market in 2014. The DRC government is known to want to increase domestic refining of copper and cobalt products and decrease exports of unrefined materials. The proposed export ban on concentrates did not come to fruition in 2013, but government rhetoric suggests that such measures could still go ahead in 2015.

Whilst a blanket ban remains unlikely, the 2013 increase in export tax, from US$60/t to US$100/t, could be the first in a number of changes. Gécamines, the state-owned producer, is in the process of conducting a review of its partnerships to determine whether its interests are being preserved. This review, together with the expected introduction of a new mining code which could see an increase in royalty and tax rates, could have profound implications for foreign companies operating in the country.

Reports that ENRC may be forced to sell its DRC assets might also have the potential to change the complexion of the DRC production landscape. If the reports are accurate, will an existing producer, or a new player, acquire ENRC's assets?

What else lies in store, and where will new supply come from?

There are a number of potential mine projects that could produce additional cobalt raw materials over the next few years. However, the vast majority are at a very early stage of exploration or development and it is likely that very few new operations will come on-stream before 2018. Additional cobalt mine supply is most likely to come from expansion projects at existing producers such as those underway at Tenke Fungurume Mining in the DRC and African Rainbow Minerals in South Africa, and those being considered at Mirabela Nickel in Brazil, Moa Bay in Cuba, and Meta Nikel Cobalt in Turkey.

Another potential source of cobalt is from the numerous nickel producing operations that extract cobalt materials but do not recover them, such as those operations in the Philippines and New Caledonia which produce nickel materials for nickel pig iron (NPI) production in China. Similarly, Altona Mining in Finland produces a low-grade cobalt-nickel concentrate, which is currently stored, pending a treatment solution. These operations might look to produce cobalt if it was economical to do so. 

Which sectors and regions will drive growth in demand?

Global consumption of cobalt has increased at a CAGR of 5.5% between 2008 and 2013. Roskill expects future demand to grow at a similar rate, expected to be 6.1%py to 2018. As a result, cobalt demand will reach over 110,000t.

Growth in demand for cobalt will be led by Asia, particularly China, South Korea and Japan. Growth in demand in these countries will be driven by increasing battery cathode production. Demand for cobalt in battery applications is forecast to grow at 9.2%py to 2018 and will continue to be the greatest contributor to increased demand. Demand for cobalt in catalysts is also expected to grow at a high rate (8.3%py), underpinned by high growth in demand for PET and in the oil and gas sector.

What changes to prices may be expected, if any?

Roskill expects the cobalt market to remain in a state of oversupply until 2016 when supply and demand are expected to be broadly in balance. However, it will take several years for the recent period of oversupply and resultant stockpiling to be reconciled, which is likely to keep prices in check over the medium term.

Roskill expects prices to continue on a slight downward trend in 2014 with the ramping up of new projects in Madagascar and the Philippines brining additional material into the market and compounding the current oversupply situation. Thereafter, Roskill expects a modest year-on-year increase in prices with high grade cobalt real prices increasing at roughly 3.6%py to 2018.

Will we see more of a shift to LME pricing?

The LME's introduction of cobalt and molybdenum futures contracts in 2010 brought about an alternative to trade journal sourced pricing and introduced the option of regulated exchange pricing information. Uptake in switching to this new platform has been slow. However, in 2013 it was announced that Freeport-McMoRan Copper & Gold would use LME pricing data for some US$200 million worth of annual cobalt sales. Freeport said it will turn to LME-based pricing for cobalt and cobalt hydroxide supply contracts from January 2014.

It is unclear if other producers, traders or end users will choose to adopt LME-based pricing and it is commonly held that the trading volume will need to increase before more producers switch to LME pricing. It was reported in the Financial Times that ENRC planned to introduce an element of LME pricing into its contracts from 2014 when it will be selling its cobalt using a weighted average of the LME and Metal Bulletin prices. It is likely that if major producers such as Freeport and ENRC switch to LME pricing, then other smaller producers may follow suit.

Roskill's new Cobalt: Market Outlook to 2018 contains full estimates for 2013, profiles on major producers and projects, an assessment of key market trends, an overview of developments in the DRC, and an outlook for supply, demand and prices to 2018. This latest edition is available, until the 28th February, at an introductory price of £4680 / US$7470 / €5580 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44-20-8417-0087 , Email: Web:

Note to editors

Roskill Information Services Ltd. of London, UK is a leading provider of multi-client and bespoke market research services to the minerals and metals industry.

The new Cobalt report contains 327 pages, 156 tables and 121 figures plus an appendix of international trade statistics. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.

For further information on this report, please contact Robert Baylis, or +44-20-8417-0087.

SOURCE Roskill Information Services
 January 09, 2014
DRC Delays Copper, Cobalt Export Ban Once Again
    Publisher: Cobalt Investing News
    Author: Charlotte McLeod


DRC Delays Copper, Cobalt Export Ban Once Again

As 2013 drew to a close, the big news in the cobalt sector was that the start date of the Democratic Republic of the Congo's (DRC) ban on the export of copper and cobalt concentrate had been moved to December 31, 2014. It was supposed to come into effect on January 1.

"The export of copper and cobalt concentrates is banned," Metal Bulletin quotes a notice signed by mines minister Martin Kabwelulu as saying, "however, a moratorium until December 31, 2014 is granted to all mining operators producing copper and cobalt to comply."

The delay is a response to ongoing electricity constraints in the DRC, information that will likely be unsurprising to cobalt market participants. Since the ban's announcement, skeptics have argued that the country simply does not have enough electricity to run the refining and processing equipment that the ban's implementation calls for.

Indeed, the current delay marks the second time that the ban has been delayed. It was originally scheduled to begin in July 2013, but as that start deadline loomed, the country instead decided to increase the tax on cobalt concentrate exports by $40 per metric ton (MT). That put duties at $100 per MT on July 15.

No tax increase has been announced this time. Prices for the metal also do not seem to have been affected yet.

Brazil steps up

In what Metal-Pages is calling an "unprecedented request," Brazil's Companhia de Pesquisa de Recursos Minerais (CPRM) has submitted a plan to explore for minerals "on the seabed in a three thousand metre squared area of the South Atlantic Ocean." The area is "said to contain a crust rich in manganese, cobalt and iron ore."

The application was submitted on December 31 to the Jamaica-based International Seabed Authority (ISA), which states on its website that "the applicant has elected to offer an equity interest in a joint venture arrangement with the enterprise in lieu of a reserved area," as per Metal-Pages.

Expanding further on the proposal, BNamericas notes that Brazil has said it will invest US$11 million during the first five years of exploration; in total, exploration would last 15 years. CPRM's application is to be assessed on February 3, at the ISA's next commission meeting.

Price update

December was a fairly quiet month for cobalt prices. Metal-Pages reported on December 3 that the western cobalt industry had seen little impact from a late November power transformer blowout at Eurasian Natural Resources' (LSE:ENRC) Zambia-based Chambishi operation. Cobalt 99.6-percent material was up just 10 cents, to $11.60 to $12.60 per pound, while the 99.3-percent and 99.8-percent grades were steady, trading at $11.25 to $12 per pound and $11.75 to $12.75 per pound, respectively.

Over in China, the story was a little different. Metal-Pages said on December 18 that the Chinese cobalt market had "rebounded after falling for three months" due to both the incident at Chambishi, as well as an ore price increase expected next year from major miner Glencore Xstrata (LSE:GLEN). Chambishi 99.8-percent material sat at $14.36 to $14.65 per pound, up from $14.06 to $14.43.

Most recently, Metal-Pages reported a London Metal Exchange settlement cobalt cash price of $29,000 to $30,000 per tonne on January 7. The previous range was $26,200 to $26,700 per tonne.

Company news

Midway through December, Glencore Xstrata paid $430 million in cash to acquire the remaining 14.5-percent indirect equity interest in Mutanda Mining from High Grade Minerals, as per Mining Weekly. Glencore Xstrata now holds a 69-percent indirect interest in the company, while the rest is owned by a subsidiary of Fleurette, which, the news outlet explains, is "owned by Line Trust Corporation on behalf of the Ashdale Settlement, a trust established in 2006 for the benefit of the family of Dan Gertler."

Mutanda, a copper and cobalt producer operating in the DRC, is "seen as one of Glencore's key growth assets in Central Africa's copper belt," Mining Weekly notes. Metal-Pages states that in 2012 it produced 87,000 tonnes of copper and 8,500 tonnes of cobalt.

Junior company news

Releasing a slew of news throughout December was strategic metals company Global Cobalt (TSXV:GCO), whose focus is on Russia's Republic of Altai.

Perhaps most notably, the company reported on December 19 the completion of the 2013 drill program at its Karakul project. Though all assay results are currently pending, Erin Chutter, Global Cobalt's president and CEO, commented that they "confirm the mineralization delineated by historic operators" and "should ultimately increase the confidence in the historic resource estimates as we prepare an NI 43-101- compliant Resource Report in the coming months."

On a different note, the company announced a C$2 million non-brokered private placement financing on December 16. Initially, Global Cobalt planned to issue up to 10,000,000 units at a price of $0.20 each; however, the day after the financing was announced, Global Cobalt revealed that it had been oversubscribed and increased the size of the offering to up to 11,250,000 units. That will allow the company to raise $2.25 million.

To read the full article please click here to visit

 January 07, 2014
Brazil Ready to spend $11 Million on Cobalt seabed Exploration
    Publisher: Cobalt Investing News


Brazil Ready to Spend $11 Million on Cobalt Seabed Exploration

BNamericas reported that Brazil's national geological service (CPRM) has submitted a plan to explore "a cobalt-rich ferromanganese crust in international waters" to the International Seabed Authority, located in Jamaica.

As quoted in the market news:

"Brazil has agreed to invest US$11mn in the first five years of exploration, which would last 15 years, CPRM's geology and mineral resources director Roberto Ventura was quoted as saying by paper O Globo.

The region has potential for the exploitation of cobalt, manganese and iron, according to Ventura.

"The application area is in the Rio Grande Rise and the applicant has elected to offer an equity interest in a JV arrangement with the enterprise in lieu of a reserved area,' ISA said, adding that CPRM's application is sponsored by the federal government of Brazil."

Please click here to read the full BNamericas report

 October 24, 2013
Will Cobalt Rise Above $16 per Pound in Q4?
    Publisher: Cobalt Investing News
    Author: Charlotte Mcleod


Will Cobalt Rise Above $16 per Pound in Q4?

The cobalt market has been quiet this month. Since putting on a strong performance in September, prices for the metal have flattened out, largely due to slow market conditions. However, some believe that cobalt may yet rises as high as $16.85 per pound before the end of 2013.

In a report released at the beginning of October, Metal Pages Research states that it views the "fundamentals of the market as positive particularly in relation to the other specialty alloys markets."

Specifically, the news outlet identifies three factors that are supporting the cobalt market. Those are:

1. Positive fundamentals: In terms of supply, global refined cobalt output fell by 6.1 percent in 2012, to 77,189 tonnes; since then, "there has not been a supply response from cobalt producers," meaning that the market is now in a "slight deficit position." On the demand side, the metal's "diverse end user base" is working in its favor.

2.Demand picking up: Metal-Pages Research anticipates demand from that diverse base of end users growing as 2013 draws to a close, noting that "activity is beginning to rebound in a number of markets outside of China," where demand is currently fairly weak.

3.Continued deficit: Cobalt's current "slight deficit" is expected to persist into next year, likely reaching a high point at the beginning of 2014, before "new laterite output is fully up and running."

Metal-Pages Research believes that given those factors, cobalt has already hit its lowest price for this year ($10.85 per pound on January 3), and may rise as high as $16.85 per pound this quarter --- an exciting prospect for those who have been watching the metal languish below $14 per pound for most of the year.

(to read the full article please click here to visit

 October 21, 2013
The Sale of the Sunshine Refinery Leaves Formation Metals with A Strong Treasury, No Debt, and Looking For Opportunities
    Author: Ryan Jackson


NOTE: This article is a follow-up, more in-depth article done by dated September 22, 2013 and is also posted on the Company's website.

The Sale of the Sunshine Refinery Leaves Formation Metals with A Strong Treasury, No Debt, and Looking For Opportunities

The US$12 million injection allowed Formation to pay down a C$5 million convertible debenture which was due by the end of October, while the remainder adds to the nearly C$8 million of cash and cash equivalents the company held as of the end of August.

It's the final chapter in a very profitable experience for Formation Metals.

The company acquired the refinery and achieved commercial production with it in 2007. It then went on to provide revenue not only from its profitable operations, but also from the sale of a tailings pond for more than three times the acquisition price only a few years later.

None of which means that Formation has been immune to the terrible market conditions which have been weighing on the industry.

Formation's primary goal over the last few years has been the development and commissioning of the flagship Idaho cobalt project which, once complete, should produce high purity cobalt.

Cobalt has been one of the strongest performing metals in 2013, so there's a bit of momentum in the space. But not enough to have got Idaho into production.

Formation would have liked to have seen the mine in operation by now, but the combination of a downturn in the industry and the falling cobalt price last winter stalled the company's ambitions.

So, the hunt for the capital which would allow Formation to commence underground development continues.

But in the meantime, Formation's management team have been keen to explore other opportunities, and the first step was to raise capital and erase debt.

The sale of Sunshine has achieved both those goals and Formation's chief executive, Mari-Ann Green isn't limiting herself when it comes to the types of transactions she is now willing to consider.

They could, she says, "include acquisitions, mergers, joint ventures, strategic investments or any combination thereof with a view to enhancing shareholder value".

Though there's no word yet if any opportunities in particular have caught Mari-Ann's eye, Formation's Rick Honsinger points out that there are opportunities within the existing Formation portfolio too.

While there's been little investment in assets other than the flagship Idaho cobalt project in recent years, the money which has been added to the treasury from the sale of the refinery is not earmarked for the Idaho and could therefore be applied more broadly throughout the company.

Among the opportunities are four gold and silver properties in North America which the company either owns or holds options over.

These include the El Milagro project in Tamaulipas State, Mexico, where historical exploration has shown bonanza silver grades often in excess of two kilograms per tonne, and where combined lead-zinc grades usually exceed 10%.

In addition to the silver and gold properties, the company's two per cent stake in the Virgin River uranium project in the Athabasca Basin provides investors with the potential for significant upside.

Rick explains: "We own a small percentage but it's considered a major project in Northern Saskatchewan with the right joint venture partners, Cameco and AREVA."

Following the discovery of mineralization in 2004, Cameco has been intrigued by what it encountered at Virgin River because of geological similarities to McArthur River.

Now the Cameco team intend to identify, through further drilling, the scope of the Centennial deposit at Virgin River along and across its 650 metre identified length, and thence to determine the economic viability of the deposit.

The funds raised by the sale of Sunshine should allow Formation to cover its portion if Cameco decides to go ahead with an exploration program at Virgin River in the near term.


Formation Metals' Management Note: This article ends on a brief discussion of the Company's uranium project. Coincidentally, positive news regarding Uranium in Canada was recently published in an article by as a result of Prime Minister Stephen Harper's recent visit to Belgium discussing the Canada-European Union Free Trade Agreement.

 September 26, 2013
Cobalt Prices on the Rise Following Summer Slowdown
    Publisher: Cobalt Investing News
    Author: Charlotte McLeod


Cobalt Prices on the Rise Following Summer Slowdown

Cobalt prices are not what they once were, Metal Bulletin recently reported, but that doesn't mean investors should consider the metal a lost cause. In fact, September has been treating cobalt fairly well.

As August drew to a close, prices for low-grade cobalt began a "rapid turnaround," rising from a four-month low of $11.45 to $13 per pound to $12.10 to $13.75 per pound. Meanwhile, high-grade cobalt stabilized at $12.40 to $14.20 per pound.

Metal Bulletin notes in an August 30 article that the uptick was the result of expectations of rising demand in September. "Basically, it's going up into September. People are starting to cover in for the end of the year. There's a little more demand from our customers," one consumer told the news outlet...

(to read the full article please click here to visit

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
 September 23, 2013
The US$12 Million Sale Of The Sunshine Refinery Could Be The Icing On A Very Lucrative Cake For Formation Metals
    Author: Ryan Jackson


The US$12 Million Sale Of The Sunshine Refinery Could Be The Icing On A Very Lucrative Cake For Formation Metals

It's no surprise, given the condition of the mining markets, that a great many assets are up for sale as mining companies attempt to monetize non-core assets to secure precious capital.

The majors have made headlines for a number of ill-conceived acquisitions made at the peak of the market which have become black holes for capital and offer few prospects of salvation.

But not all companies seeking to divest assets are in the same boat.

Formation Metals is a case in point.

The company is now selling its Sunshine Refinery in Idaho, but only after a very good run.

Sunshine has been an extremely profitable endeavour right from the get go and, over the years, has provided the company with operational cash flow. "We paid US$1.275 million for the refinery and a few years later we sold the tailings pond for US$4.6 million", explains Formation's Rick Honsinger.

At first, the plan was to retrofit the facility to process concentrate produced at Formation's flagship construction-stage cobalt project, the Idaho cobalt project.

However, technical optimization studies determined that a new, purpose built facility would be far more effective in that role.

Nonetheless, the refinery was successful in refining into bullion high silver content material.

"Since the commencement of commercial operations in 2007, the refinery did report total positive earnings of close to C$3 million. The whole refinery has turned out very cash positive from a relatively modest initial investment", says Rick.

Of late though, it's been a different story. "The refinery has been finding it difficult to get enough material in the front door to get the capacity up to a point to justify the operational expenditures", says Rick.

The refinery ceased to be profitable for Formation in 2012. But the proposed sale would bring in US$12 million for the company taking the grand total income from the endeavour to US$18.325 million, all from an initial investment of US$1.275 million.

But regular readers of Minesite will know that this latest agreement is Formation's second attempt to sell the refinery this year, and follows a period of negotiations with Waterton Global Resource Management which ended at an impasse.

Negotiations with Waterton were protracted and as they went on silver retreated from around US$30 an ounce to below US$20. That was disappointing.

But the new offer, says Rick, is "superior and we're happy to entertain it".

"While we were dealing with Waterton we were under exclusivity with them and that's why we couldn't entertain any other offers, but as soon as that deal was no longer part of the picture we were able to negotiate with Sunshine Silver Mines."

For Sunshine Silver Mines, the acquisition of the Sunshine refinery is a natural move. The refinery was originally built to service Sunshine Silver's nearby Sunshine mine.

"We always knew we would be doing something with them in one form or another", says Rick. "We were hoping to have them as one of our major clients when we were in operation but at this point it makes sense for them to acquire it outright."

US$500,000 is already in escrow and is non-refundable in the event that Sunshine Silver Mines breaches the contract and causes the sale not to conclude, a clear statement of intent.

The first order of business, when or if the US$12 million is received, will be to clear Formation's corporate debt. "There's a US$5 million convertible debenture due at the end of October", explains Rick. "It is a priority to get that paid down."

US$12 million is not enough to complete the remaining construction at Formation's flagship Idaho Cobalt Project, which remains ready for underground development. But the funds will leave Formation debt-free and in a good position to search for additional opportunities.

"What the US$12 million does is give us the opportunity to have another look at some of our existing assets as well as other opportunities that arise in these challenging markets", explains Rick.

Though the Idaho cobalt project has been Formation's focus in recent years, the company does hold a strong portfolio of exploration assets.

Little work has been done recently at these projects since the majority of funds raised by Formation were earmarked for the flagship cobalt project.

But this new capital injection could be applied more broadly while management waits for mining markets improve to the point where finance for Idaho once again looks realistic.

These additional projects offer the company a diversified commodity portfolio. One of the most exciting is Formation's two per cent interest in the Virgin River uranium project in the Athabasca Basin.

"We own a small percentage but it's considered a major project in Northern Saskatchewan with the right joint venture partners, Cameco and AREVA", explains Rick.

Work to date has focused on the Centennial deposit at Virgin River which was discovered in 2004 and is similar to the mineralization at McArthur River. Cameco intends to identify, through further drilling, the scope of the Centennial deposit along and across its 650-metre identified length and determine the economic viability of the deposit. Additionally, Cameco plans to drill regional exploration targets outside the current defined deposit.

The company also owns or holds options on four gold and silver projects in North America. Rick points to the El Milagro Project in Tamaulipas State, Mexico as potentially interesting for the company. Historical data shows that silver grades at El Milagro reach bonanza levels often in excess of two kilograms per tonne and combined lead-zinc grades usually exceed 10%.

But what about the cobalt project?

Though project financing is exceptionally scarce in the current market, cobalt itself has been a strong performer in 2013.

"Cobalt outperformed the majority of other commodities", points out Rick. "The asking price for aerospace grade cobalt metal has risen over 40 per cent from its lows in December through to this September."

In the meantime, Formation will continue to keep the Idaho cobalt project up to date in its permitting while maintaining a construction-ready stance at the mine site.

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 September 20, 2013
Firmness in Western Cobalt Prices Remains
    Publisher: Metal Pages
    Author: John Evans


Firmness in Western Cobalt Prices Remains

SÃO PAULO (Metal-Pages) 20-Sep-13. Recent firmness on Western cobalt markets has continued to be underpinned by renewed interest since end of August, as the mating season for long term contracts approaches, which could turn out a strong determining factor on spot market prices in the months ahead.

High grade material continues to change hands in a range between $14-15/lb with Sumitomo and Jinchuan material said to be fetching somewhere in the middle of that range and Falconbridge being offered around the top. "Sumitomo, Jinchuan, Vale and Falconbridge seem to have cleaned out the cupboard for two months so any consumer that needs high grade for the next two months can only buy from trade," said a trader. One US trade source said there is little spot business around, though every now and then enquiries for small tonnages appear. Click here for the full story

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