Cleaner, Smarter Cobalt

Press/Media: Press / Media

Description

Discusses developments in the global cobalt market

Period1 Nov 2012

Media contributions

1

Media contributions

  • TitleCleaner Smarter Cobalt
    Degree of recognitionNational
    Media name/outletResourceStocks Magazine - Aspermont
    Media typePrint
    Duration/Length/Size1 page
    CountryAustralia
    Date1/11/12
    DescriptionWe are transitioning towards a lightweight, greener, smarter world – one in which we already demand that powered electronic and electrical devices are ever smaller, portable, low maintenance and long-lasting. Key speciality metals have a significant role to play in this ongoing transition - with cobalt not least among them. Like rare earths, tungsten and lithium among other contributors to emerging technology developments, all of us will become more familiar with the various roles that minor metals play as this ‘electronic revolution’ evolves – just as our predecessors became accustomed to steel-making and steel alloy manufacture during the industrial revolution.

    Cobalt is used in battery manufacture, ceramics, dyes and catalysts – which together can be considered its various chemicals uses - and as an alloy (including aerospace engines, prosthetics and land-based gas turbines), cemented carbides and magnets. The main use is chemicals at around 50 per cent of total consumption.

    Demand for cobalt in batteries looks set to underpin future growth – including anticipated strong growth in demand for electric and hybrid vehicles. The global market for cobalt is now approaching 80,000 tonnes of contained cobalt, projected to grow rapidly to exceed 100,000 tonnes.

    China and regional Asia are the main consumers for chemicals consumption of cobalt, with Western Europe the leading geographic region for superalloy demand (largely driven by aerospace applications). Other chemical uses of cobalt are widespread: They include cobalt oxide used in lithium ion rechargeable cells and in ceramic colouring, cobalt acetate used for manufacturing polyethylene, terephthalate (PET) used in packaging applications, cobalt nitrate and cobalt carbonate used in oil refineries , cobalt chloride used in tyres and gas-to-liquids catalysts, cobalt hydroxide used in chemicals manufacture, in nickel cadmium and Ni-metal hydride batteries, cobalt sulphate used in electroplating and cobalt carboxylates used in paint , as ink driers and adhesives in tyre manufacture. Such a broad suite of applications for cobalt lowers the risk of demand stagnation should any single use become redundant.

    Shifting to the supply-side, mine supply from copper-cobalt and laterite-style nickel operations are the main sources of cobalt. Global supply now exceeds 80,000 tonnes cobalt, having approximately doubled since 2000.

    Global mining and metals companies such as Brazil’s Vale, Russia’s Norilsk, China’s Jinchuan Group, Zambia’s Chambishi Metals and Japan’s Sumitomo all produce cobalt. Freeport-McMoran’s Tenke Fungurume copper-cobalt project in the Democratic Republic of Congo (DRC) is becoming a major source of production with potential to reach 8,000 tonnes per annum.

    Cobalt’s recent market growth and anticipated increasing market importance have been assisted by the metal having become tradable on the London Metal Exchange (LME) since 2010. Cobalt specifications are either 99.3 per cent or 99.8 per cent purity.

    Cobalt occurs within selected nickel and copper deposits: That is, cobalt is often a by-product with nickel in laterites, forming in the near surface weathering profile above ultramafic rocks, notably in tropical regions. Also, in the copper belt of Central Africa, cobalt mineralisation is closely related to copper mineralisation.

    Cobalt mine supply originates from countries such as the Democratic Republic of Congo (DRC), Zambia, Australia, Cuba, Morocco, New Caledonia, Russia, Canada, Brazil and China. Low grade cobalt ore sits at around 0.05 per cent cobalt when mined in conjunction with nickel laterite (where the nickel in the laterite typically grade 1-3 per cent. Higher grade cobalt ores can grade up to several per cent cobalt.

    Cobalt has a history of price volatility, in part due to the relatively small global market and also that around half the total mine production of cobalt is produced as a by-product. As such, cobalt production tends to not immediately respond to either scarcity or over-supply in the market.

    Historical price lows have dipped to around US$4-6 per pound whereas peaks have reached over US$30 per pound and even briefly above US$50 per pound. Analyst expectations of the cobalt price outlook lie in the US$13 – US$18 per pound range for 2013-15.

    There are no cobalt-only resources companies listed on the ASX for investors – but a number of companies do hold assets which contain significant cobalt resources. These companies include AusNico (ANW), Havilah Resources (HAV), Highlands Pacific (HIG), Metals X (MLX), Metallica Minerals (MLM), Broken Hill Prospecting (BPL), Heron Resources (HRR) and Fission Energy (FIS).
    Producer/AuthorAllan Trench
    PersonsAllan Trench

Keywords

  • cobalt
  • nickel
  • copper