NetworkNewsWire
Editorial Coverage: With global electric vehicle (EV) demand
growth creating the potential for tight supplies in battery metals
such as cobalt, multinational companies and industrialized nations
are working to secure these critical metals as prices are projected
to rise.
- The growing market for electric vehicles has led to much higher
demand for battery metals such as cobalt, lithium and nickel.
- As the largest producer of EVs and largest consumer of battery
metals in the world, China is aggressively looking to secure
additional supplies of these critical minerals.
- Savvy companies are looking to lock in long-term supplies of
battery metals.
Driven by the technological advances and environmentally
friendly advantages offered by electric vehicles, the long-awaited
EV revolution seems to be taking hold. Numerous global corporations
are competing for access to limited supplies of battery metals.
Prospective cobalt producer Pacific Rim Cobalt Corp.
(OTCQB: PCRCF) (CSE: BOLT) (PCRCF
Profile), which just released a detailed corporate update, looks to be in an ideal
position to supply those corporations with cobalt. Major miners
such as BHP Group Limited (NYSE: BHP),
Freeport-McMoRan Inc. (NYSE: FCX) and VALE
S.A. (NYSE: VALE) could play a role in growing the global
supply of nickel, cobalt and lithium. Apple Inc. (NASDAQ:
AAPL) took the extraordinary step of looking for direct
supplies of cobalt last year, which shows how heated the battery
metals market has become.
To view an infographic of this editorial, click here.
EVs Challenge the Global Supply Chain, Drive Innovation
The rise in EV popularity has created a rush to buy and create
new supplies of battery metals because, unlike a normal auto, EVs
require large amounts of nickel, cobalt and lithium. Investment
bank Goldman Sachs
predicts that sales of batteries to power EVs will rise from
under $10 billion to $60 billion by 2030, which will require that
the global availability of battery metals expands to meet swelling
demand.
In addition to creating new demand for battery metals, EVs are
also challenging nations to compete in order to expand
battery-producing capacity. Chinese, Japanese and South Korean
companies are all working to
build-out their battery production infrastructure at a rapid pace.
China’s BYD Auto. Company is currently one of the largest producers
of both EVs and batteries for EVs. The company plans to expand its
battery manufacturing capacity to 60 gigawatt hours by 2020, nearly
half of China's total battery manufacturing capacity in 2017.
BYD is part of the Chinese government's plan to become a world
leader in EV production. Beijing has spent billions of dollars to
support the EV industry over the last decade. According to Chinese
research company Gaogong Industry Research Institute, Chinese
battery makers held seven of the top 10
slots on the list of the world's largest suppliers of
lithium-ion batteries for EVs last year. BYD ranked third globally,
and China's Contemporary Amperex Technology Ltd. (CATL) ranked as
the world's top EV battery manufacturer. Bloomberg New Energy
Finance estimates that China will produce 70 percent of the world's
electric-vehicle batteries by 2021.
China Isn't Alone in the Battery Build-Out
China wasn't the first country to build large-scale battery
manufacturing facilities for EVs. Both Japan and South Korea have
extensive battery fabrication operations, and major companies in
both nations plan to expand their capacity over the next decade.
According to JATO Dynamics, only 668,000
battery-powered cars were sold worldwide in 2017, but
year-over-year growth was strong at 78 percent. Roughly 82 million
passenger cars were sold in the same year, which offers some idea
of the potential market size for EVs.
There is neither a lack of government support nor a lack of
demand for EVs. One of the only areas where EV growth could face
problems may be the supply of battery metals such as nickel,
lithium and especially cobalt. Until recently, cobalt was a
by-product metal and hadn’t been mined as a primary mine product
since the World War II. In addition, currently, more than 60
percent of the world's cobalt is mined in the Democratic Republic
of Congo. Not only is the DRC difficult from a labor-rights
perspective, the country also has a long history of violence and an
inconsistent record of shipping mineral
resources.
Battery producers located in Asia are eager to secure access to
cobalt supplies outside of Southern Africa. Pacific Rim
Cobalt Corp. (OTCQB: PCRCF) (CSE: BOLT) is in a unique
position to support these battery producers grow their operations.
The company controls the Cyclops Nickel-Cobalt Project in
Indonesia, which is in proximity to all three major
battery-producing nations.
As an initial step in that direction, Pacific Rim recently
signed a preliminary offtake agreement with
Beijing Easpring Material Technology, recognized as an industry
leader in China, to purchase nickel sulphate and cobalt sulphate
from the company’s Cyclops project for an initial term of five
years. Indonesia's record on allowing the development of
large-scale mines is strong, and the Cyclops Nickel-Cobalt Project
is closer to Asian ports than either Africa or Australia, boding
well for the success of this venture.
Occupying a Unique Position
Asian battery producers have limited options when it comes to
sourcing essential metals regionally. Pacific Rim Cobalt's Cyclops
Nickel-Cobalt Project occupies a unique location, which is within 4,500 km of accessible ports in Shenzhen, Seoul
and Tokyo. The 5,000-hectare property also benefits from excellent
local infrastructure allowing for year-round access, with an
airport and city nearby. The project is a relatively new
development, unlike many cobalt projects in the West, which have
been mined-out sporadically over the last century.
In addition, further exploration work at Cyclops is planned.
After the company’s exploration results from a mini-bulk sample
were announce last year, Pacific Rim Cobalt CEO Ranjeet Sundher
commented that “we expect the near-surface
nature of cobalt/nickel mineralization at the Cyclops project will
lend itself well to low-cost, logistically straightforward
drilling. We thus anticipate the opportunity to undertake a
resource calculation study, as well as ongoing metallurgy and
process option testing, will present itself in the near future.
It’s going to be a busy year ahead, and we look forward to getting
the drills turning and building value.”
Pacific Rim Cobalt's Cyclops Nickel-Cobalt Project has returned
positive initial sampling results. Further exploration work may
help the company delineate a resource and build its way towards a
definitive resource estimate. There appears to be no shortage of
demand for battery metals, and the Cyclops Project is well placed
to potentially service nearby battery-producing companies.
A Global Drive for Vital Resources
Pacific Rim Cobalt is exploring for cobalt in a jurisdiction
that has produced some of the biggest mines in human history.
Freeport-McMoRan Inc. (NYSE: FCX) developed the
Grasberg mine in Indonesia. It is the world's largest gold mine and
second-largest producer of copper. The mine operates in the remote
highlands of the Sudirman Mountain Range in the Papua province,
located on the western half of New Guinea. Freeport-McMoRan and its
predecessors have been the only operator of exploration and mining
activities in the area since 1967.
Major miners such as BHP Group Limited (NYSE:
BHP) and VALE S.A. (NYSE: VALE) are also
looking for ways to leverage the growth in demand for battery
metals. BHP is a world-leading resources company that extracts and
processes minerals, oil and gas. The company is headquartered in
Australia but sells its products worldwide. BHP announced last year that it would be trying to sell as
much as 90 percent of the output from its Australian Nickel West
operations to the battery sector.
With its primary focus on mining, Vale is expanding production
at its Voisey’s Bay nickel mine in Canada, and the cobalt produced
there is already under contract to waiting buyers, including Wheaton Precious Metals Corporation. The
company is the world’s largest iron ore and nickel producer, with
operations in other mineral sectors as well. VALE invests in
research studies around the world to identify new mineral reserves,
and its teams of geologists and engineers use techniques ranging
from rock-sample collection and subsoil drilling to satellite image
analysis to identify the presence of minerals.
Despite production expansions by major miners, companies such as
Apple (NASDAQ: AAPL) that rely heavily on
batteries will be competing
against the EV industry to buy these essential materials. Cobalt is
a critical ingredient in the tech giant’s core product line,
including iPhones, iPads, Apple Watch and MacBooks. Recognizing the
growing demand for the mineral used in its lithium-ion batteries,
Apple may be negotiating directly
with miners to secure acquisition of the precious metal
annually for at least the next five years.
For more information on Youngevity International, visit Pacific Rim
Cobalt Corp. (OTCQB: PCRCF) (CSE: BOLT)
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