| June 18, 2008 Forest Service OKs new cobalt mine west of Salmon Publisher: Idaho Statesman Author: Statesman staff | |
| The developer will have to put up money to assure water quality and protection for endangered fish. The federal government has approved a proposed cobalt mine west of Salmon in central Idaho, subject to conditions. The U.S. Forest Service approved Formation Capital Corp.'s plan to mine cobalt - used in jet engines, batteries for hybrid and electric cars and other machines - in the Panther Creek drainage of the Salmon-Challis National Forest. "As we have firmly believed, a sustainable, responsible mine plan can be designed without compromise to the environment," said Bill Scales, president of the Vancouver, B.C., company's U.S. subsidiary. The agency will require Formation Capital to post financial assurances to guarantee long-term water quality management, forest Supervisor Bill Wood said. It also will require measures to protect endangered fish and to meet federal pollution-discharge rules. Formation Capital also must obtain administrative access and power line easements across adjacent private land prior to commencing ground-disturbing activities. The mine should not interfere with efforts to restore salmon and steelhead fisheries damaged by past mining at the adjacent Blackbird Mine site, he said. "This is possibly the most critical milestone the company has reached regarding the Idaho Cobalt Project," said Mari-Ann Green, CEO of Formation Capital Corp. Copies of the Forest Service's record of decision are available at the Salmon-Cobalt Ranger District office and Forest supervisor's office in Salmon. In addition, a copy will be available at the public libraries in Salmon and Challis. -END- | |
| June 17, 2008 Formation Capital shares soar on plan of operations approval Publisher: National Post, FP-Mining Author: David Pett | |
| Formation Capital Corp. got one step closer to building its Idaho cobalt project after the U.S. Forest Service approved a modified plan of operations for the proposed mine located in the Panther Creek drainage west of Salmon. Investors applauded the news, driving shares in Vancouver-based Formation up more than 9% to 72¢ in early afternoon trading Tuesday. "This is possibly the most critical milestone the company has reached regarding the Idaho Cobalt Project," stated Formation Capital CEO Mari-Ann Green "After years of permitting efforts, the Forest Service has issued a Record of Decision that outlines the required modifications to the mine Plan of Operations that, once incorporated, will allow us to commence construction of the mine and mill facilities." As part of the modified plan of operations, Formation Capital will be required to post financial assurance for long term water quality management and also address terms and conditions provided by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service for management of endangered fishes. The company will also require the company to obtain a national pollution discharge elimination system permit from the Environmental Protection Agency. -END- | |
| April 28, 2008 Aircraft demand to keep hi-tech metals high Publisher: Reuters Author: Daniel Magnowski | |
| LONDON, April 24 (Reuters) - The global trend towards more frequent air travel should keep planemakers busy and in turn ensure prices of rare and hi-tech metals such as cobalt, rhenium and titanium stay strong for years. Often mined in inaccessible and risky territories, these metals are prized for their exceptional strength and heat resistance, making them essential for jet engines and airframes. "Two engines use twice as much cobalt and rhenium as one engine," said Stephen English, who trades cobalt for London-based merchant SFP (Metals). On Wednesday, Boeing's commercial planes unit said it would deliver 475-480 aircraft this year, rising to 500-505 in 2009. It delivered 441 commercial aircraft in 2007. "That's why we're in eye of the storm," English said. "Today, you have evidence that refined cobalt supply is 54,000 tonnes, and demand is between 61,000 and 65,000 tonnes." Though aluminium is the metal most widely used in aircraft, the aerospace industry represents only around 3 percent of world aluminium consumption, said consultant James F. King at an industry conference in Barcelona last week. Aerospace is by far a more crucial end market for less well-known, but much higher-value, metals. One of these is cobalt, a blue-tinted metal mined mainly in the Democratic Republic of Congo, Australia and Canada by firms including Camec, BHP Billiton, Xstrata and Vale. It trades at around $50 per lb on world markets -- making it more than 30 times more expensive than aluminium -- near to an all-time high, and up more than 50 percent since last April. In 2007, almost a quarter of the world's cobalt was used in materials known as 'superalloys' which are capable of withstanding temperatures of up to 1,100 degrees Celsius. Some 75 percent of these went into aircraft, according to figures from industry group the Cobalt Development Institute. Sustaining cobalt prices is the fear that as demand accelerates, supply may not be able to grow quickly enough to meet the world's needs. Though there are new mines scheduled to come on-stream around the end of the decade, many in the market are uncertain they will reach production as quickly as their owners plan. Power supply and infrastructure issues in the DRC may hinder project development, while the generally higher cost of bringing mines to production, linked to rising steel and energy prices, can lead to delays or cancellation, according to a presentation given by J. Scott Bending, president of Canadian metals explorer and refiner Formation Capital. "Very few entrants into the high purity cobalt market within the next decade are anticipated," he said. On Tuesday, mining firm Lundin said capital expenditure estimates for the Tenke project in the DRC, said to be one of the world's richest cobalt deposits, had doubled to $1.75 billion from last October's figure of $900 million. Several other projects in the DRC have been delayed, or production forecasts reduced. For a FACTBOX on Congolese cobalt mining. RHENIUM ROCKETS Another speciality metal to benefit from a growing aerospace industry is rhenium, which is mined in Chile, Kazakhstan and the United States. It sells for around $10,000 per kg, up around fivefold from late 2005, according to data from Anthony Lipmann, who trades metals for British firm Lipmann Walton & Co. Though prices have risen dramatically, buyers such as Rolls-Royce, General Electric and Pratt & Whitney, a division of United Technologies, have not cut their consumption of the metal. "Even at $10,000 per kg, the price as a proportion of a jet engine is peanuts," said a trader who attended the conference. Another metal used in aircraft engineering is titanium. China is projected to require 2,600 new jets worth $280 billion over the next 20 years, and India more than 900 large jets worth $100 billion within the same period, according to data from Mirko Grosso, account manager at titanium producer RTI International Metals. As more planes are built, world titanium demand from the commercial and military aircraft industries will grow, he said, putting demand for the ultra-strong metal at around 170 million lbs in 2015, up from just under 100 million in 2007. (Editing by Nigel Hunt) -END- | |
| March 24, 2008 Majors Under Fire in DRC Publisher: ResourceInvestor.com Author: Stephen Clayson | |
| LONDON (ResourceInvestor.com) -- The saga of the review of mining contracts being carried out by the DRC (the Democratic Republic of Congo) took a new turn last week as the country's government released the full text of the review, in French only, on its website. Mining companies active in the DRC were informed of the outcome of the review by the government last month, and some made announcements in view of this, but others did not, and those that did revealed little of substance. Therefore the full implications of the review were unclear, although it had been apparent since a leak in November last year that numerous 'renegotiations' and even cancellations of the contracts under which foreign miners were working in the DRC were in the offing. Now however, the cat is out of the bag, and it seems that the big boys, including Freeport-McMoRan [NYSE:FCX], BHP Billiton [NYSE:BHP; LSE:BLT], Anglo Gold Ashanti [NYSE:AU] and De Beers, are all in the line of fire. Freeport-McMoRan is undertaking perhaps the DRC's biggest mining project, the development of Tenke Fungurume, a gargantuan copper-cobalt deposit, and the DRC government has said that it wishes to renegotiate the terms of the project. Likewise, Anglo Gold Ashanti's Kilo gold exploration joint venture, where last year a 2.93moz inferred resource was outlined, is up for renegotiation, as are diamond projects held by BHP Billiton and De Beers. The DRC government participates in the country's mining industry through a small number of state mining companies, which hold equity stakes in projects and receive payments on behalf of the government, and it is these companies that will be the main beneficiaries of the renegotiations. Smaller Western companies active in the DRC include Anvil Mining [TSX:AVM; ASX:AVM], Katanga Mining [TSX:KAT], Metorex [JSE:MTX], the Central Africa Mining & Exploration Company [AIM:CFM], First Quantum Minerals [LSE:FQM; TSX:FM], Moto Goldmines [AIM:MOE] and Banro Corporation [AMEX:BAA; TSX:BAA]. Outlook It seems likely that the renegotiation process will rumble on for some time yet, and could conceivably result in undesirable outcomes for some operators. It is impossible to say exactly what sort of settlements may eventually be reached, or how long the renegotiation process will take. We have no way of knowing what discussions are taking place behind the scenes, and some companies have suggested that they will try and take the issue out of the DRC and into the international courts. How the government of the DRC would respond to such a move is unclear, but it is quite possible that the government sees the review as a starting point for talks, not necessarily as a collection of take it or leave it offers to the operators of the various projects concerned. That said - the DRC government would probably prefer not to have the renegotiating process too open to international scrutiny. After all, this is a country where the army makes a bit on the side by smuggling minerals out of the country and the leader of the opposition is in exile claiming that he fears for his life. Seemingly, the government of the DRC sees the rises in commodity prices since many contracts were negotiated as grounds for renegotiation in its favour, and feels that it can decide when rates of return on mining projects are 'excessive' and intervene to redress matters to its satisfaction. Sentiments like this are of course completely anathema to the investment community, which craves a predictable fiscal and regulatory environment when considering whether to undertake mining projects, and this is exactly what does not, and may never, exist in the DRC. The ever present undercurrent is that with the Chinese pouring money into Africa in general and the DRC in particular, Chinese groups may stand ready to pick up projects if current holders don't like the new terms being offered. Ultimately, the DRC's government is taking this line because it believes it can afford to. If commodity prices were at rock bottom, maybe investors just wouldn't bother with the country. If the Chinese weren't scouring the globe for resources and throwing money around to ensure they get them, maybe the Western mining companies would have a stronger hand to play. However, the DRC should be careful not to take things too far. In the environment of uncertainty and under the table horse trading that now exists in the country, marginal projects may not be developed, and the DRC will lose out. But projects like Tenke Fungurume are attractive enough that their operators may choose to bite the bullet and endure some turning of the screws by the government. -END- | |
| February 22, 2008 Cobalt sees another bull run Publisher: Metal-Pages | |
| LONDON (Metal-Pages) 22-Feb-08. The cobalt market is seeing another bull run similar to the gains seen at the end of 2007, with traders saying they expect the market to go higher and that Russian grade material will also soon hit the $50/lb mark. The current screen price for Russian material shown by Norilsk Nickel however is $46.40/lb, and this price was published on the 20 February. Meanwhile BHP Billiton raised its screen offer price to $52.50/lb this week following a sale of 5 tonnes of material at $51/lb on 19 February. However, BHP Billiton has yet to find takers at the $52.50/lb level. A trader said: "The bull run continues, the price will soon go to $60-65/lb, in the next year consumption is is expected to reach 75,000 tons and there is a 30% growth in demand. Consumers are ringing me up at midnight." He quoted a price of $51-53/lb for high grade material and $48-50/lb for Russian material. Another trader agreed: "The market is very strong, it has come into its own, consumers are short and are desperate for material for March delivery, they are looking for ways to pause the bull run but they can't he said, adding that demand is particularly strong from Japan. He quoted $52/lb for Falconbridge material and $47/lb for Russian material. However a third trader said that while there is no question the market is firmer, the bull's views are to be taken with a pinch of salt. "We have had a lot of enquiries, but have not bookd a lot of high grade material, customers are reluctant to pay the higher prices and no one will pay $50/lb for Russian material. The higher numbers are partly due to market manipulation," he said. -END- | |
| February 14, 2008 BHP-Billiton raises its cobalt offer price to $50 Publisher: Metal-Pages | |
| LONDON (Metal-Pages) 14-Feb-08. The BHP-Billiton cobalt website made a further 5 tonne sale into Asia this morning at the company's offer price of $49.25/lb. It follows a similar deal yesterday at $48.75/lb, its first screen sale since 6 February when it sold 15 tonnes into North America at $48.50. BHP-Billiton has subsequently moved its price up to $50/lb -- the market's target level and one which has been meeting a fair amount of resistance. One UK-based trader commented: "The next stage has begun. Now watch for the low grades to catch up." Russian producer Norilsk Nickel, meanwhile, maintains its offer price at $45.50, having sold 10 tonnes in one transaction at $45.55/lb last week. -END- | |
| February 06, 2008 Congo deals major blow to miners Publisher: MINING REPORTER Author: ANDY HOFFMAN | |
| Government reopens all contracts, saying it wants a bigger slice of profits Scores of mining companies hoping to tap the billions of dollars worth of mineral riches in the Democratic Republic of the Congo were dealt a major setback yesterday after the government indicated it wanted a bigger slice of their profits and said that all mining contracts would have to be renegotiated. Congo's vice-minister of mines Victor Kasongo said that a "brief and open" appeal process will be created to help "fast track" the renegotiations. In an address to a mining conference in South Africa, Mr. Kasongo said that when a government panel was formed last April to study the validity and fairness of 61 mining contracts, it expected it would have to rectify a few agreements. "We actually found that we had not a single contract that was properly constituted. What was meant to be a minor corrective has turned out to be multiple, major surgery," he said. -END- | |
| January 11, 2008 Cobalt price soars as stockpiles run low Publisher: telegraph.co.uk | |
| The slew of gadgets and gizmos unveiled at this week's Consumer Electronics Show in Las Vegas could soon become much more expensive to run than anyone had previously imagined. The latest news from the oil, mining and gas industries Cobalt, the key mineral used to make electric batteries, has soars to a new record high. Strong demand and scarce supply pushed prices in Europe to $46 a pound. BHP Billiton, the London-listed mining giant, was only willing to sell stock at $47.50 by close of trade, according to traders. The price has soared by about $5 in the past week and is 70 per cent above the levels seen a year ago. With stockpiles being run down, the price looks set to climb further. "There's no metal around, producers are sold out," said one European trader. Cobalt is a key component in manufacturing lithium-ion batteries, one of the most common types of rechargeable battery used in consumer electronics. Radioactive versions of cobalt are used in the treatment of cancer as a tracer that can monitor drugs passing through the body. It is widely used in the defence industry. The US Defense Logistics Agency has historically kept a large stockpile of the mineral to help secure the US military's needs. One London-based trader said the DLA held about 52m pounds of cobalt in 1993, but this has been whittled down to little more than 1.5m pounds. "The average rate of annual sales in those 14 years has been 1,650 tonnes per annum," the trader said. "At this rate of sales the DLA will have exhausted its cobalt stocks by June of this year." -END- | |
| January 03, 2008 US$50/LB COBALT PREDICTED Publisher: mineweb.com Author: Rodrick Mukumbira | |
| Cobalt price running wild on predicted big supply shortfall. Cobalt was perhaps overshadowed by gold and uranium and other base metals during 2007, but the metal's price is accelerating on tight supplies and a predicted big shortfall as demand grows fast. It is not as luxurious as gold or as hot as uranium, but cobalt left its mark in 2007, as the former and the latter overshadowed its profile. Speculative buying and consumer demand in the face of supply constraints in the Democratic Republic of Congo (DRC) and the depletion of US government's and former Soviet Union's stockpiles saw the price for the metal surging over 60% in 2007, the highest since a modern market for cobalt trading was established in 1978. The cobalt market is currently tight, with producer stocks either said to be sold out or running low, resulting in BHP Billiton and Russia's Norilsk Nickel repeatedly increasing offer prices at every sale. At the beginning of 2007, the average offer spread cobalt price stood at about US$25 per pound, an increase of about US$12 per pound from the beginning of 2006. The price soared to US$40.25 at the end of the year due to surging demand for batteries for mobile phones and hybrid cars as well as supply constraints following a moratorium on the export of raw concentrates from the DRC in October. Since the early 90s, cobalt prices had been held down by sales of the US government's stockpiles, and low grade cobalt material from the former Soviet Union, which have largely depleted, according to a Gold Editor Stock Info report. China increased its consumption to a fifth of global production last year - up from 3% a decade ago, according to Resource Investor, and political concerns following a return to conflict in mineral rich northeastern DRC has had investors worried that production could be constricted. The Financial Times reported this week that shipments from the DRC, an important supplier, have almost dried up since October when the central government banned concentrates from leaving the country. Nevertheless, cobalt's public profile is set for further heightening. Cobalt is largely a copper and nickel mining by-product, with annual production rarely exceeding 65,000 tons, and is now found in a growing range of rechargeable batteries, super alloys such as turbine blades in jet engines, chemicals such as dyes and pigments, wear resistant alloys, catalysts including gas-to-liquid converters, and high performance magnets. Independent statistics say over the past four years, cobalt use in rechargeable batteries has grown by nearly 300%, the fastest growing segment being the metal's use in fuel-efficient hybrid cars, as the world looks for ways of reducing air pollution and fuel consumption. The Financial Times report said a battery containing about 2.5 kilograms of cobalt powers the Prius, Toyota's fuel-efficient hybrid car. It quotes auto industry consultants JD Power forecasting that US hybrid-car sales will increase from about 350,000 this year to just over one million by 2012. Sales of cell phones and laptops are also surging boosting the fortunes of the metal. This week cobalt for January delivery hit a record-high price of US$45 per pound, according to BHP Billiton's cobalt open sales website, pointing to approximately 50% price increase since January last year. BHP Billiton, which controls over two percent of the market, sold five tonnes of 99.80% cobalt on December 14 to Europe at US$43, up US$3.75 from its December 7 sale and US$5.25 from its November 29 sale. Norilsk Nickel was offering the metal at over US$43 per pound. "The horse has broken out of the stable and is breaking into a full speed stampede, so it's difficult to know where it will end by the time its passions are fully spent," said a bullish trader quoted by Metal-Pages. Banking group Credit Suisse, which in September inaugurated a market in hi-tech metal cobalt for investors seeking a stable commodity contract, is also confident. Late last month it raised its average price target for cobalt this year by 50% predicting a US$50 per pound price. "The cobalt market should remain tight, underpinned by tightening short term supply and surging demand," Credit Suisse is quoted as saying, adding "Cobalt prices could spike to $50 per pound in the short term if supply continues to dry up while demand remains strong. "We believe consumption particularly from China shows no signs of slowing and global demand for cobalt could grow as much as 7% per annum from 2007 to 2009." The banking group also predicted a supply deficit of 1,680 tons next year. -END | |
| December 27, 2007 Why the Run-Up in Cobalt Demand? Publisher: ResourceInvestor.com Author: Jack Lifton | |
DETROIT (ResourceInvestor.com) -- The following price charts from the excellent new Internet minor metals information center MinorMetals.com, published by TheBullionDesk.com, clearly show the roller coaster ride that cobalt has been on during the last six months in particular, and the last two years in general. In the earlier period cobalt first doubled and then plateaued. Now in the last six months of 2007 cobalt prices have gone up another 50% above the base established during the plateau period. The total increase in price of cobalt over the last two years has, as of now, been 300%; thus cobalt has been a far better investment during the last two years than either gold or platinum.
Is the current cobalt price run-up a "bubble", or the froth around a bubble, or is it a solid movement in demand that is running ahead of supply? There are just two reasons why the price of a natural resource goes up: 1. The real (actual) demand exceeds the supply, or; 2. Speculative demand exceeds supply. I believe that cobalt is going up in price because of a combination of the above two factors. First of all the existing uses for cobalt are growing and show no signs of moving to substitute materials. Second, a "new" cobalt use, which has so far flown under the investment radar, has begun to grow, and I believe that this has initiated a speculative surge in demand among commodity market players and a surge of risk management by the purchasing departments of some large corporate end-users of cobalt. The first factor to be noted in trying to form an understanding of cobalt pricing and supply is the fact that "cobalt is not found as a native metal but generally found in the form of ores. Cobalt is usually not mined alone and tends to be produced as byproduct of nickel and copper mining activities.... In 2005, the Democratic Republic of the Congo was the top producer of cobalt with almost 40% of the world share, followed by Canada, Zambia, Russia, Brazil, and Cuba." The USGS notes that "The United States did not mine or refine [any] cobalt in 2006," but that the U.S. imported for consumption 11,800 metric tonnes of cobalt in 2006. Since the USGS gives total mine production of cobalt globally in 2006 as 57,500 metric tones, it is clear both that the U.S. is a major consumer of cobalt and that cobalt is truly a minor metal when compared to copper and nickel, from the ores of both of which it is principally extracted, as a byproduct. An excellent and comprehensive discussion of the current strategic and critical applications of cobalt is to be found in the October 2006 issue of the Journal of Metals, which is a subscription only publication for members of The Metals Society, a first-class organisation for those interested in technical metallurgy. I will summarize the article briefly: It says that "Cobalt has played an important part in the composition of nearly all the new alloys developed since the 19th century for cutting tools and wear resistance. The special properties of cobalt have been utilized in such applications as catalysts, paint dryers,..., and rechargeable battery chemicals. ...Superalloys are major applications.... The major uses of cobalt based superalloys (45% cobalt) are in turbine blades for aircraft jet engines and in gas turbines for pipeline compressors." Of special interest from the article is the comment that "Cobalt-based batteries are...[an] extraordinary application where the use of cobalt in rechargeable batteries grew enormously between 1995 and 2000....The addition of cobalt to the electrodes substantially enhanced the cell's life, increased [nickel metal] hydride thermodynamic stability, and inhibited corrosion." Finally, note the final paragraph of the article especially the last sentence, which I have put in italics: "The increasing use of cobalt in rechargeable batteries for electric vehicle applications is expected to increase the use of cobalt even further. A major shift to hybrid-electric vehicles in automotive technology will dramatically increase the demand for cobalt-based batteries. Newly emerging demand combined with increases in cobalt use for other types of turbine engines and gas-to-liquid catalysts is underpinning the recent growth in cobalt demand and is expected to drive future cobalt consumption to unprecedented levels." Toyota has just announced this month that it plans to manufacture 1 million hybrid-electric vehicles a year sometime in the 2010's. It is clear that even if Toyota's goal is not met in the actual year of 2010, the total number of hybrids made that year just by Toyota, GM and Honda will meet or exceed 1 million units. This fact is, in my opinion, the principal driver today of cobalt prices. Let's look at the numbers: At least 1.5 million hybrid vehicles have been manufactured since Toyota introduced the first mass produced vehicle of this type, the Prius, in 1999. Toyota alone has already made 1 million of them and 79% of all of Toyota's hybrid vehicles have been sold in the U.S. I have frequently reminded readers of Resource Investor that the nickel metal hydride battery packs used in a Prius contain up to 300 pounds of nickel and as much as 64 pounds of rare earth metals, principally lanathanum. Today I want to point out that each battery pack also contains cobalt. The comprehensive article "Developments in hybrid vehicles and their potential influence on minor metals", written and presented in 2005, contains the graph below and the surrounding commentary: 
The conclusions and graph above are based on the premise that future hybrid vehicles will continue to use nickel metal hydride batteries; I personally predict that some, and perhaps, even all, hybrids will utilize safe reliable nickel metal hydride batteries at least as far into the future as the above graph runs. All of the "new" cobalt demand coming just from hybrid vehicle nickel metal hydride battery construction is today probably already in excess of market supply. Cobalt production has tripled in the last 12 years from 20,000mt per annum in 1995 to nearly 60,000mt per annum in 2007. Production will have to increase by another 25% just to keep in equilibrium with the above forecast hybrid demand and the natural growth in existing uses. A friend of mine warned me on the phone today that there is a high probability of a downside to this optimistic view of demand exceeding supply. He said that if a safe reliable lithium technology battery is developed for hybrid vehicle operation then cobalt will immediately be in surplus and the price will crash from today's highs. Let's examine his thought a little. The highest energy density most efficient lithium technology battery available today, which is almost universally used in laptops, cell phones, and even concept cars is the one based on lithium/cobalt oxide electrode technology: the so-called lithium ion battery. I have written before that the world's largest lithium producer, Chile's SQM [NYSE:SQM], and the General Motors Corporation both agree that an optimum size lithium-ion vehicle propulsion battery would need 2 kilograms of lithium. The (reversible) chemical reaction that describes the operation of this widely used battery is: 
The above equation tells us that a battery pack utilizing 2 kilograms of lithium will require 8.4 kilograms of cobalt or 18.5 pounds; this is six times as much as the current nickel metal hydride batteries! So, if nickel metal hydride battery packs were converted to lithion-ion, cobalt type, batteries then the 2015 demand just for such batteries of cobalt would be nearly 50,000mt annually or the equivalent of nearly all of today's annual supply! Take heart, though, because we are told that all kinds of newer cheaper and safer lithium ion battery technologies are "being developed." But, in the meantime.... Ultimately I would predict that a compromise will be reached. I think that a large proportion of workaday hybrid vehicles will be made and continue to be made with nickel metal hydride batteries; some of the rest will be made with exhaustively researched and more safely designed lithium cobalt ion batteries; and the top few performance types will use one of the non-cobalt based lithium ion battery technologies. I say this because it is clear that end-users are bidding up cobalt prices to insure their supplies for the near term production of items like superalloys where cobalt is absolutely critical and cannot be substituted, and that battery makers are hedging their bets on the future composition of the end-use hybrid battery market by laying in supplies of the metal even as, and, in particular, in case that, the global economy slows down because they recognize that since cobalt is a byproduct, a drop in either copper or nickel demand immediately impacts not only the supply of those metals but also of cobalt. The battery makers know that the demand for hybrids may well rise if the price of oil continues to go up and that hybrid vehicle customers will not wait forever for new battery technologies. Dollar investors, take note: At this point I want you to keep in mind that the increase in demand for cobalt for the new hybrid battery use is coming today entirely from outside of the United States. Essentially all vehicular hybrid batteries are today being made in China and Japan. China and Japan both believe in national stockpiling by government funded agencies for critical metals. Private Japanese "trading" and mining companies and both "private" and state-owned Chinese trading and mining companies are today diligently scouring the world for sources and supplies of critical and strategic metals such as cobalt, nickel and lithium because, for example, in the case of cobalt, they are worried about the most extreme of the above scenarios. The Chinese are concerned first and foremost with keeping their domestic economy fed with the natural resources it needs. The Japanese also have this as a goal but it is to ensure their survival as a trading nation as well. In either case cobalt, among other resources, will be mostly unavailable in the global market place after it is acquired by China or Japan. Should the Japanese and Chinese succeed in locking up most of the additional supply of cobalt to be created during the next decade and the most extreme of the above demand scenarios materialize, it will be a significant blow to American heavy industry and the U.S. military. In the case of civilian industry, it could result in the acceleration of its relocation to China. -END- | |
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