Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
As a general rule, the most successful man in life is the man who has the best information
Imagine with me for a moment that the car market is at the start of a major transition. Why would I think that? Well…
I think that by 2020 battery-powered cars will become a no-brainer purchase for many of us.
The most recognized name in electric cars at the moment is Tesla Motors whose goal is to ship 500,000 cars in 2020. To reach that goal would require the entire battery industry to more than double production. That’s just Tesla – never mind other existing players and new entrants into the electric car market.
If ten percent of all cars on the road were to become battery-powered global battery production would require an astounding 20-fold increase.
JB Straubel, Tesla’s chief technical officer, called this a “massive revolution in industrialization, on a scale that is kind of hard to imagine.”
Tesla Motors has plans to build, by 2017, the world’s largest lithium-ion battery factory – a ten million square foot manufacturing and recycling center it calls ‘Gigafactory.’ Tesla says its Gigafactory alone will eventually produce 35 gigawatt-hours of battery capacity every year which is more battery power than was produced globally in 2013.
Gigafactory will lower costs by shifting material, cell, module and pack production to one spot eventually allowing Tesla to roll off their assembly lines as many as half a million electric vehicles per year.
There are three essential components to a lithium-ion, or Li-ion, battery:
Lithium is not in short supply, as a matter of fact the market is currently in oversupply.
The graphite market is a different situation. There is currently a projected deficit if even just Tesla’s goals are to be met. However there is no actual shortage of graphite at this time and dozens of junior resource companies have graphite projects with many of them quite advanced.
That’s not the case for the other critical and strategic component of the lithium-ion battery – cobalt.
Much more cobalt is used in a lithium-ion battery than graphite. As a matter of fact LiNiCoAlO3 (Li-NCA) batteries typically have nine percent cobalt by weight. That equates to roughly six kilograms of cobalt per vehicle.
According to Robert Baylis, an analyst for Roskill, the Gigafactory alone will require an additional 6,750 tonnes of cobalt (current global annual demand 75,000 tonnes) when operating at full capacity. That’s hugely significant when you consider most cobalt is produced as a by-product of nickel mining (57%) and copper mining (37%) – only 6% of our cobalt use is supplied from primary cobalt operations.
The USGS calculates cobalt reserves are dispersed as:
Some minerals are considered more important than others. A critical or strategic material is a commodity whose lack of availability during a national emergency would seriously affect the economic, industrial, and defensive capability of any country.
“Cobalt is considered a ‘technology enabling’ substance as its at the forefront of technological developments and innovation, whether for energy storage systems and catalytic processes, which are so important for the global green agenda, or enabling greater efficiencies in the operation of gas turbines. So subtle and essential is cobalt that it also forms the basis of many established and new biotech applications crucial for human health and diagnostics. In fact cobalt is so important for industrial development that the EU has recognised that it is a ‘critical’ metal for the EU in its Raw Materials Initiative, which was undertaken to help support EU industry from the effects of possible disruption to the supply of critical mineral availability.” Cobalt Facts, 2013, CDI
The U.S. Department of Homeland Security, in its most recent report, classified cobalt as a critical mineral.
The French Bureau de Recherches Géologiques et Minières rates high tech metals, including cobalt as critical based on three criteria:
Demand is increasing for critical metals due to:
Many countries classify cobalt as both a critical and a strategic metal because cobalt is used in so many diverse industrial and military applications.
Super-alloys use to be the largest use of cobalt and their manufacture still commands a large share of the market. But today the largest market share and the fastest growing use of cobalt is in energy storage – batteries.
Global Cobalt Corp. TSX.V-GCO
One of the company’s best maneuvering itself to take advantage of the ‘Revolution In Industrialization’ caused by the greening, the electrification of our land based transport systems is Global Cobalt Corp.
Global Cobalt Corporation is a critical/strategic metals company focused on the development of a new mining region in the Republic of Altai, a mineral rich pro-mining region of southern Siberia, Russia. Global Cobalt’s goal is to bring on stream a number of highly prospective projects and establish a new mining jurisdiction focused on cobalt and other strategic metals.
Global Cobalt’s flagship asset is the world-class Karakul Cobalt Deposit which has the potential to be the largest known primary cobalt asset outside of Africa. The Karakul option agreement was a milestone accomplishment and positioned Global Cobalt as a first-mover into the Republic of Altai.
The most recent results from the Winter 2013 diamond drill program at the Karakul Cobalt Project continue to duplicate and support a metal zonation geological model that demonstrates the Karakul Cobalt Deposit includes higher grade cobalt, higher grade copper and higher grading tungsten and bismuth zones than previous work had indicated. To date results correlate very well with, and verify historic Soviet-era drill hole results. Most importantly GCO’s results have confirmed the validity of the Karakul Cobalt Project. Also, new mineralized zones were discovered and promising silver and tungsten values were returned. Plans have been outlined to accelerate completion of a NI 43-101 compliant resource and fast-track development of the project to supply the growing demand for cobalt.
“Each release of assay results continues to confirm the validity of the historical drill and technical data but more importantly, we are gaining an understanding of the unique high grade sections for each metal group within the Karakul Cobalt Project which is key as we initiate on mine planning activities.” Erin Chutter, CEO of Global Cobalt
One of Global Cobalt’s strategic advantages rests in the Altai Sister Properties, a collection of assets that covers prospective ground in a westerly arc north of Karakul. Although the primary development focus remains the Karakul deposit, the Altai Sister Properties offer tremendous upside potential and, in some cases, extensions of known mineralization. Initial analysis of the historic drilling results, along with a geophysical review indicates that the Altai Sisters have the potential to add dramatically to the Company’s future resources.
Global Cobalt has an agreement with China’s top battery material supplier, Beijing Easpring Material Technology Co., Ltd. The Agreement provides GCO the right to sell to Easpring up to 100 percent of the total crude cobalt hydroxide, cobalt concentrate or cobalt carbonate production from the Karakul Cobalt Project for an initial term of 10 years from the commencement of commercial production at competitive market prices. In addition, the Agreement also allows for Easpring to participate in future mine project financing. Global Cobalt has also awarded a Feasibility Study to Beijing General Research Institute of Mining & Metallurgy, a leading global mining consultancy.
Speaking to Global Cobalt’s activities in the Russian Federation, Mr. Georgiy Mamedov, Russia’s Ambassador to Canada commented in a written statement on March 14, 2014:
“I would like to reiterate that Russia is committed to inviting Canadian companies to invest and work in Russia. We welcome foreign investment and will work closely with mining and exploration companies as part of that strategy. Global Cobalt Corporation is the type of company that we encourage to be active in Russia and we are very supportive of the Company’s efforts to be successful in its activity.”
Conclusion
Tesla is highlighting the revolution in industrialization currently underway – the electrification of our land based transport systems and energy storage affordable for everyone.
Global Cobalt Corp., with its highly qualified management team has the exploration, development and production expertise to enable timely, skilled development of their impressive asset portfolio.
Global Cobalt is the first-mover into a new mining region, the mineral rich, pro-mining Altai Republic of Russia’s southern Siberia. GCO is the pioneer, the first foreign, investable, publicly traded mining company to advance the mineral resources in the entire region.
Global Cobalt Corp. TSX.V: GCO, cobalt and the revolution in industrialization should be on all our radar screens. They are all definitely on mine, are they on yours?
If not, they should be.
Richard (Rick) Mills
Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of Aheadoftheherd.com. His articles have been published on over 400 websites, including:
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.
Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
