The Australian Mining Review - - FRONT PAGE - REUBEN ADAMS

The price per tonne of cobalt – es­sen­tial to EV bat­tery pro­duc­tion – rose to $82,000 on the Lon­don Me­tal Ex­change in mid-Fe­bru­ary. This rep­re­sents a tripling of value since the start of 2016, and a 147 per cent jump since Jan­uary 2017.

BUR­GEON­ING EV de­mand is al­ready prov­ing a dis­rup­tive force for both the min­ing in­dus­try and end users of met­als such as lithium and cobalt.

In or­der to meet this in­creas­ing de­mand for EV bat­ter­ies, cobalt sup­ply will need to reach 180,000 tonnes (t) by 2026 – up from 48,000t in 2016, ac­cord­ing to Bench­mark Min­eral In­tel­li­gence.

Platts ex­pected a tripling in de­mand to more than 300,000tpa by 2030.

This surge in de­mand for bat­tery met­als could ef­fec­tively slow the EV boom – with tight­en­ing cobalt sup­ply the most likely of­fender, wrote Diana Kinch, edi­tor at S&P Global Platts SBB Steel Mar­kets Daily.

“Bot­tle­necks are al­ready emerg­ing in the EV sup­ply chain,” she said.

“Tesla motors fell be­hind in its pro­duc­tion tar­gets last Oc­to­ber.

“The lag is per­sist­ing partly be­cause Pana­sonic has been un­able to sup­ply bat­ter­ies quickly enough, due to in­suf­fi­cient met­als sup­ply avail­able at the right price, ac­cord­ing to met­als con­sul­tancy Roskill.

“Like­wise, Volk­swa­gen has re­port­edly been un­suc­cess­ful in strik­ing a deal with any min­ing com­pany af­ter is­su­ing a ten­der in Septem­ber for a min­i­mum of 5 years sup­ply of cobalt for bat­ter­ies at a fixed price.”

Now, Ap­ple is look­ing at buy­ing cobalt in bulk direct from min­ers for at least the next five years, and BMW is close to sign­ing a 10 year sup­ply con­tract for both lithium and cobalt.

In re­sponse to de­mand, min­ing gi­ant Glen­core is set to in­crease its cobalt out­put in the Demo­cratic Repub­lic of Congo (DRC) at its Katanga mine, which will add 11,600 tonnes of cobalt to Glen­core’s to­tal pro­duc­tion in 2018.

But sup­ply side is­sues are still ex­ac­er­bated by the geopo­lit­i­cal risks and hu­man right abuses as­so­ci­ated with the in­dus­try in the DRC, which is cur­rently re­spon­si­ble for two-thirds of global sup­ply.

The DRC par­lia­ment has also pro­posed a hike in cobalt roy­al­ties from 2 per cent to 10 per cent to boost rev­enues as part of a long planned min­ing code revamp, which may de­ter fur­ther for­eign in­vest­ment.

This makes more pro­duc­tion out­side the po­lit­i­cally-charged DRC es­sen­tial to min­imise the im­pacts of an im­pend­ing cobalt sup­ply deficit.

Aus­tralian Projects

Aus­tralia, home to the world’s sec­ond-big­gest cobalt re­serves, is see­ing a rush of in­ter­est in ad­vanced lo­cal projects and cobalt-fo­cused ex­plor­ers.

In Fe­bru­ary, shares in of bat­tery and tech­nol­ogy met­als de­vel­oper Aus­tralian Mines surged af­ter the com­pany signed an off-take agree­ment with South Korean bat­tery maker SK In­no­va­tion for nickel and cobalt from its flag­ship Sconi project in QLD.

The agree­ment is con­tin­gent on Aus­tralian Mines se­cur­ing project fi­nanc­ing by the end of 2018 and for min­ing to start be­fore the end of 2020.

Clean TeQ is aim­ing to start pro­duc­tion from it’s Sun­rise project, one of the largest cobalt de­posits out­side Africa, in 2021.

In Fe­bru­ary, the NSW De­part­ment of Plan­ning and En­vi­ron­ment for­mally is­sued the min­ing leases (MLs) over the project area.

The com­pany is cur­rently pre­par­ing a mine op­er­a­tion plan (MOP) for ap­proval, which will en­able the com­mence­ment of site works and con­struc­tion later in 2018.

Game Chang­ers

But th­ese project are years away from pro­duc­tion and will not fill the sup­ply gap in the short to medium term.

This has seen com­pa­nies look for in­no­va­tive al­ter­na­tives.

A Sam­sung sub­sidiary plans to buy stakes in re­cy­cling tech com­pa­nies to en­sure long-term cobalt sup­ply, Bloomberg re­ported ear­lier this year.

One of th­ese re­cy­cling com­pa­nies is Bel­gian-based Umi­core, which had about 10,000 em­ploy­ees and a turnover of €11.1 billion in 2016.

Umi­core chief ex­ec­u­tive Marc Gryn­berg told the Fi­nan­cial Times that re­cy­cling cobalt from used smart­phones was an un­tapped mar­ket.

“We have bil­lions of dis­missed end-of-life smart­phones … that could be utilised to power mil­lions of elec­tric ve­hi­cles. Mil­lions,” Mr Gryn­berg said.

“If there is one thing that needs to be done … start­ing now is to make sure there are mech­a­nisms in place to mo­ti­vate peo­ple to re­turn their dis­used smart­phones.”

But re­cy­cling will not be enough on its own – pro­jected an­nual cobalt pro­duc­tion from old bat­ter­ies is a drop in the ocean next to the in­crease in pro­jected yearly de­mand.

Com­pa­nies and re­searchers are also in­ves­ti­gat­ing al­ter­na­tives; like min­imis­ing the amount of cobalt in EV bat­ter­ies, or re­plac­ing it en­tirely.

Most re­cently, re­searchers at North­west­ern Univer­sity in Illi­nois have cre­ated a highly ef­fi­cient, in­ex­pen­sive lithium-iron-ox­ide bat­tery that re­places cobalt with iron.

Pro­fes­sor Christo­pher Wolver­ton and his team of re­searchers, in col­lab­o­ra­tion with a team of re­searchers from Ar­gonne Na­tional Lab­o­ra­tory, de­vel­oped a recharge­able lithium-iron-ox­ide bat­tery that can cy­cle more lithium ions than its com­mon lithium-cobal­tox­ide coun­ter­part.

Pro­fes­sor Wolver­ton’s team has im­proved upon the com­mon lithium-cobalt-ox­ide bat­tery by lever­ag­ing two strate­gies: re­plac­ing cobalt with iron, and forc­ing oxy­gen to par­tic­i­pate in the re­ac­tion process.

“Four lithium ions for each me­tal — that would change ev­ery­thing,” he said.

“That means that your phone could last eight times longer or your car could drive eight times far­ther.

“If bat­tery-pow­ered cars can com­pete with or ex­ceed gaso­line-pow­ered cars in terms of range and cost – that will change the world.”

Glen­core’s Katanga mine in the DRC will boost cobalt pro­duc­tion by 11,600 tonnes in 2018. Im­age: Glen­core.

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