Cobalt bulls con­firmed as me­tal jumps to $75,500 a met­ric ton on LME

Zambian Business Times - - FRONT PAGE -

COBALT is one me­tal that mar­kets have given aa blind eye to. Some­thing that will give the mar­kets goose bumps is that the blue me­tal had a bal­lis­tic in 2017 clos­ing the year at $75,500 per met­ric ton on the Lon­don Me­tal Ex­change - LME, a 129% rally. This was fu­eled by sen­ti­ment around sup­ply fears and an on the other end of the coin, de­mand side from the bat­tery mar­kets. Mea­sured from its record low hit in Fe­bru­ary 2016, the me­tal is more than $50,000 more ex­pen­sive.

Given these lofty lev­els – and con­sid­er­ing that the volatile com­mod­ity topped $100,000 a ton over 10yrs ago – bat­tery mak­ers and en­ergy stor­age re­searchers have been work­ing hard to find a sub­sti­tute for cobalt, or at least re­duce the re­quired load­ing.

Now that break­through may just have been made.

Backed by the US Depart­ment of En­ergy, re­searchers at North­west­ern Univer­sity's McCormick School of En­gi­neer­ing led by pro­fes­sor of ma­te­ri­als science and en­gi­neer­ing Christo­pher Wolver­ton, have de­vel­oped a lithium bat­tery which re­places cobalt with iron ( iron ore was priced at $76 a ton on Thurs­day 04 Jan­uary).

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

North­west­ern in part­ner­ship with the Ar­gonne Na­tional Lab­o­ra­tory cre­ated a recharge­able lithium-iron-ox­ide bat­tery that's not only much cheaper but can also cy­cle more lithium ions than its com­mon lithium-cobalt-ox­ide coun­ter­part, tech­nol­ogy that has been on the mar­ket for 20 years:

“Be­cause there is only one lithium ion per one cobalt, that lim­its of how much charge can be stored. What’s worse is that cur­rent bat­ter­ies in your cell phone or lap­top typ­i­cally only use half of the lithium in the cath­ode.”

The [North­west­ern] fully recharge­able bat­tery starts with four lithium ions, in­stead of one. The cur­rent re­ac­tion can re­versibly ex­ploit one of these lithium ions, sig­nif­i­cantly in­creas­ing the ca­pac­ity beyond to­day’s bat­ter­ies. But the po­ten­tial to cy­cle all four back and forth by us­ing both iron and oxy­gen to drive the re­ac­tion is tan­ta­liz­ing. “Four lithium ions for each me­tal — that would change ev­ery­thing,” Wolver­ton 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.”

Ac­cord­ing to the in­sti­tu­tion's web­site Wolver­ton has filed a pro­vi­sional patent for the bat­tery and he and his team "plan to ex­plore other com­pounds where this strat­egy could work."

Of course, the lab is a long way from the road but ve­hi­cle mak­ers are spend­ing tens of bil­lions to push into bat­tery-pow­ered ve­hi­cles and au­ton­o­mous-driv­ing sys­tems.

While de­mand for lithium, cop­per, nickel and spe­cialty me­tals will also in­crease with the global shift away from in­ter­nal com­bus­tion en­gines to an elec­tric ve­hi­cle mar­ket au­tomak­ers have ex­pressed the deep­est con­cerns about the sup­ply chain for cobalt.

An­nual pro­duc­tion of the raw ma­te­rial is only around 100,000 tons with the bulk com­ing from the Demo­cratic Repub­lic of the Congo, where fears about po­lit­i­cal in­sta­bil­ity and the chal­lenges of eth­i­cal sourc­ing com­bine to su­per­charge sup­ply con­cerns.

Ac­cord­ing to S&P Global to­day six of the top 10 cobalt mines are in the DRC. Due pri­mar­ily to Chi­nese in­vest­ment by 2022 the cen­tral African na­tion will host the nine largest cobalt pro­duc­ers. Pri­mary cobalt mines are scarce – 90% of global pro­duc­tion is as a byprod­uct of cop­per and nickel min­ing.

In De­cem­ber lux­ury ve­hi­cle maker BMW said its needs for car-bat­tery raw ma­te­ri­als such as cobalt and lithium will grow 10-fold by 2025 and that it had been sur­prised at just how quickly de­mand is ac­cel­er­at­ing. Au­tomak­ers in­clud­ing world num­ber two Volk­swa­gen have been scram­bling to se­cure long term sup­ply con­tracts, with lit­tle suc­cess.

Other play­ers are also see­ing op­por­tu­nity in the cobalt mar­ket. “It's a way for in­vestors to spec­u­late on the price of cobalt, plain and sim­ple”

Canada's Cobalt 27 Cap­i­tal has been suc­cess­ful in rais­ing ad­di­tional funds to build its cobalt stock­piles since list­ing in June last year pro­vid­ing “a way for in­vestors to spec­u­late on the price of cobalt, plain and sim­ple” ac­cord­ing to the Toronto-based com­pany's CEO. Reuters this week re­ported that just two firms ap­par­ently con­trol at least 80% of cobalt stock­piles in LME ware­houses around the world al­though the im­pact on the broader mar­ket could be lim­ited given that in­ven­to­ries have dwin­dled to a mere 580 tons in an­other sign of how tight the mar­ket has be­come.

Top cobalt miner Glen­core in De­cem­ber an­nounced it is restart­ing pro­duc­tion at its Katanga cop­per and cobalt mine in the DRC and re­cently com­mis­sioned a study to mea­sure the im­pact of the boom­ing EV and en­ergy stor­age mar­ket would have on min­ing.

Based on an EV mar­ket share of less than 32% in 2030, fore­cast me­tal re­quire­ments are roughly 4.1m tons of ad­di­tional cop­per (18% of 2016 sup­ply). The move away from ga­so­line and diesel-pow­ered ve­hi­cles would need 56% more nickel pro­duc­tion or 1.1m tons com­pared to 2016 and cobalt sup­ply would have to triple to 314,000 tons.

Source: Min­

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