CNJ 0.00% 0.2¢ conico ltd

This Reuters article on VW's 24,000 - 36,000tpa cobalt tender is...

  1. 1,001 Posts.
    lightbulb Created with Sketch. 147
    This Reuters article on VW's 24,000 - 36,000tpa cobalt tender is the most exciting cobalt news I've read to date because:

    A: It proves big auto players are betting on cobalt in batteries for at least the next ten years (Of course a lot of investors have suspected of this for a while, with China tying up cobalt supply in Africa, Tesla's comments etc, but there is always the question of how far-off complete cobalt substitution could be).

    B: Mt Thirsty, if shown to be viable with the scoping study (fingers crossed this week) could be in an ideal position to meet the criteria for this tender - perhaps more suited than all other juniors. (and you can be sure the JV is putting a tender in, along with every other Aus cobalt junior).

    Thinking that if Mt Thirsty supplied VW we'd be sorted, before we even know Mt Thirsty is actually viable is a bit like the old Groucho Marx eggs and ham quote below, but it's still fun to think about.

    If we had some eggs we could have eggs and ham, if we had some ham.

    Why Mt Thirsty could be in a good position here:

    1: VW want ethical/environmentally sound cobalt. So that strikes out DRC producers (probably).

    2: Mt Thirsty is one of the only proposed cobalt mines that could potentially offer a long-term fixed price as demanded by VW, as the viability of the mine's operation will not be dependent on another commodity - nickel (ARL and most others), acid (likely, though not certain in the case of COB).

    3: From what we know about Mt thirsty's fast to mine low CAPEX plan, I'm betting it feasibly could be up and running in around two years, so by late 2019 to meet the tender. This is because in addition to Low CAPEX nature of the mine plan, the minerals are very soft, most processing equipment is off-the shelf, all infrastructure is near-by, resource is shallow, and there's no need to build accomodation because Norseman is close.

    4: The 36,000tpa cobalt possibly needed by VW is way more than any one Aus/North American/other non DRC producer can provide on their own (last year global Glencore operations produced only 28,000tpa cobat!) so VW will undoubtably be supplied by a bunch of players. Possibly every ethical supplier than can get off the ground...

    5: Mt Thirsty could offer Cobalt, Nickel and Manganese - a nice bonus.
    Exclusive: VW moves to secure cobalt supplies in shift to electric cars
    Pratima Desai

    LONDON (Reuters) - Germany’s Volkswagen (VOWG_p.DE) is moving to secure long-term supplies of cobalt, a vital component of rechargeable batteries, as the group accelerates its ambitious shift to electric cars.
    Cobalt industry sources told Reuters that VW, the world’s largest automaker, has asked producers to submit proposals on supplying the material for up to 10 years from 2019.

    Volkswagen, which decided on the strategic shift to electric vehicles (EVs) after it was engulfed in the “dieselgate” scandal, plans to invest more than 20 billion euros ($24 billion) in zero-emission vehicles by 2030 to challenge pioneer Tesla in creating a mass market.

    The company, which aims to make up to three million EVs a year by 2025, wants all the cobalt tender proposals submitted by the end of September. “The tender doesn’t actually tell you how much cobalt they want. They tell you how many EVs they want to make, you have to work out the cobalt content yourself,” one cobalt industry source said.
    Volkswagen did not respond to Reuters questions on the details of the tender but noted that the group would need more than 150 gigawatt hours of battery capacity annually by 2025 for its electric vehicles.
    This would mean major purchases of necessary materials. “The procurement project is one of the largest in the history of the automotive industry, with a total order volume of over 50 billion euros,” it said in a statement. “That will meet the Group’s needs for the first wave of e-mobility.”

    Demand for cobalt is expected to soar in the coming years due to the electric vehicle revolution as governments around the world crack down on pollution. Volkswagen is under particular pressure as it had been slow to embrace electric cars and self-driving technology until admitting two years ago to cheating on U.S. diesel emissions tests.
    Battery and auto manufacturers need to sign multi-year deals to secure supplies of raw materials including cobalt and lithium.

    The Democratic Republic of Congo (DRC) produces roughly 65 percent of global cobalt supplies estimated at around 100,000 tonnes this year. Canada, China, Russia, Australia and Zambia are also major sources.
    At the company level, the market is dominated by Glencore , which produced more than 28,000 tonnes last year.
    Reuters recently reported that Glencore had signed a major deal to sell up to 20,000 tonnes of cobalt products to a Chinese firm, a move that would help Volkswagen secure car batteries for its shift to electric vehicles.
    MISUNDERSTANDING?

    A VW logo is seen in front of the main building of the Volkswagen brand at the Volkswagen headquarters during a media tour to present Volkswagen's so called "Blaue Fabrik" (Blue Factory) environmental program, in Wolfsburg, Germany May 19, 2017. REUTERS/Fabian Bimmer

    According to the cobalt industry sources, Volkswagen said wanted all contracts agreed by the end of the year.
    Electric vehicles use rechargeable batteries containing cobalt, a byproduct of copper and nickel output, which boosts energy density and extends battery life. This allows automakers to offer guarantees between eight and 10 years.
    The Volkswagen tender specifies the chemistry for the battery will initially be six parts nickel, two parts cobalt and two parts manganese or 6:2:2, but that it could at some stage switch to 8:1:1.

    “They want a fixed price, which won’t work for people who need security and they want to reserve the right to not take metal they don’t need,” another cobalt source said. “They want producers to take all the risks ... they want an option at low prices, for long maturities at zero cost.”

    Cobalt metal is around $30 a lb, its highest since October 2008 and up from less than $10 in December 2015.
    Volkswagen has said that by 2025 it would roll out 80 new electric car models across the group, which also includes the Audi, Seat, Skoda and Porsche brands, up from a previous goal of 30. It wants to offer an electric version of each of its 300 group models by 2030.

    Analysts estimate each battery uses between 8-12 kg of cobalt. That would mean VW will need 24-36 million kg a year for three million EVs, which at current prices would total $1.6-$2.4 billion.
    The sources said the wording of the tender suggests it will probably have also gone to lithium producers, chemical producers and battery makers.

    “There’s a section on sustainability... asking what processes are in place to make sure the cobalt does not come from child labour in the DRC,” one said.

    Child labour is a reference to artisanal mining in places such as the DRC, where individuals mine independently to produce metal, often illegally and under poor health and safety conditions.

    UBS expects global sales of electric vehicles in 2025 to reach 14.2 million units or 13.7 percent of the total from under one million units and less than one percent this year.

    Analysts at CRU Group forecast the battery sector will need more than 75,000 tonnes of cobalt a year by 2025, up from around 41,000 tonnes this year.

    https://www.reuters.com/article/us-...plies-in-shift-to-electric-cars-idUSKCN1BX1RE
 
watchlist Created with Sketch. Add CNJ (ASX) to my watchlist
(20min delay)
Last
0.2¢
Change
0.000(0.00%)
Mkt cap ! $2.708M
Open High Low Value Volume
0.2¢ 0.2¢ 0.2¢ $290 193.5K

Buyers (Bids)

No. Vol. Price($)
37 76417572 0.1¢
 

Sellers (Offers)

Price($) Vol. No.
0.2¢ 4941418 10
View Market Depth
Last trade - 12.09pm 28/03/2024 (20 minute delay) ?
CNJ (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.