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Posts tagged ‘bismuth’

Cobalt: A precarious supply chain

January 14th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist

Cobalt: A precarious supply chain

 

How does your mobile phone last for 12 hours on just one charge? It’s the power of cobalt, along with several other energy metals, that keeps your lithium-ion battery running.

The only problem? Getting the metal from the source to your electronics is not an easy feat, and this makes for an extremely precarious supply chain for manufacturers.

This infographic comes to us from LiCo Energy Metals TSXV:LIC and it focuses on where this important ingredient of green technology originates from, and the supply risks associated with its main sources.

What is cobalt?

Cobalt is a transition metal found between iron and nickel on the periodic table. It has a high melting point (1493° C) and retains its strength to a high temperature.

Similar to iron or nickel, cobalt is ferromagnetic. It can retain its magnetic properties to 1100° C, a higher temperature than any other material. Ferromagnetism is the strongest type of magnetism: it’s the only one that typically creates forces strong enough to be felt and is responsible for the magnets encountered in everyday life.

These unique properties make the metal perfect for two specialized high-tech purposes: superalloys and battery cathodes.

Superalloys

High-performance alloys drive 18% of cobalt demand. The metal’s ability to withstand intense temperatures and conditions makes it perfect for use in:

  • Turbine blades

  • Jet engines

  • Gas turbines

  • Prosthetics

  • Permanent magnets

Lithium-ion batteries

Batteries drive 49% of demand—and most of this comes from cobalt’s use in lithium-ion battery cathodes:

Type of lithium-ion cathode Cobalt in cathode Spec. energy (Wh/kg)
LFP 0% 120
LMO 0% 140
NMC 15% 200
LCO 55% 200
NCA 10% 245

The three most powerful cathode formulations for li-ion batteries all need cobalt. As a result, the metal is indispensable in many of today’s battery-powered devices:

  • Mobile phones (LCO)

  • Tesla Model S (NCA)

  • Tesla Powerwall (NMC)

  • Chevy Volt (NMC/LMO)

The Tesla Powerwall 2 uses approximately seven kilograms and a Tesla Model S (90 kWh) uses approximately 22.5 kilos of the energy metal.

The cobalt supply chain

Cobalt production has gone almost straight up to meet demand, more than doubling since the early 2000s.

But while the metal is desired, getting it is the hard part.

1. No native cobalt has ever been found.

There are four widely distributed ores that exist but almost no cobalt is mined from them as a primary source.

2. Most cobalt production is mined as a byproduct.

Mine source % cobalt production
Nickel (byproduct) 60%
Copper (byproduct) 38%
Cobalt (primary) 2%

This means it is hard to expand production when more is needed.

3. Most production occurs in the Democratic Republic of Congo, a country with elevated supply risks.

Country Tonnes %
Total 122,701 100.0%
United States 524 0.4%
China 1,417 1.2%
DRC 67,975 55.4%
Rest of World 52,785 43.0%

(Source: CRU, estimated production for 2017, tonnes)

The future of cobalt supply

Companies like Tesla and Panasonic need reliable sources of the metal and right now there aren’t many failsafes.

The United States hasn’t mined cobalt in significant volumes since 1971 and the USGS reports that the U.S. only has 301 tonnes of the metal stored in stockpiles.

The reality is that the DRC produces about half of all cobalt and it also holds approximately 47% of all global reserves.

Why is this a concern for end-users?

1. The DRC is one of the poorest, most corrupt and most coercive countries on the planet.

It ranks:

  • 151st out of 159 countries in the Human Freedom Index

  • 176th out of 188 countries on the Human Development Index

  • 178th out of 184 countries in terms of GDP per capita ($455)

  • 148th out of 169 countries in the Corruption Perceptions Index

2. The DRC has had more deaths from war since WWII than any other country on the planet.
Recent wars in the DRC:

  • First Congo War (1996-1997)—An invasion by Rwanda that overthrew the Mobutu regime.

  • Second Congo War (1998-2003)—The bloodiest conflict in world history since WWII, with 5.4 million deaths.

3. Human rights in mining

The DRC government estimates that 20% of all cobalt production in the country comes from artisanal miners—independent workers who dig holes and mine ore without sophisticated mines or machinery.

There are at least 100,000 artisanal cobalt miners in the DRC and UNICEF estimates that up to 40,000 children could be in the trade. Children can be as young as seven years old and they can work up to 12 hours with physically demanding work earning $2 per day.

Meanwhile, Amnesty International alleges that Apple, Samsung and Sony fail to do basic checks in making sure the metal in their supply chains did not come from child labour.

Most major companies have vowed that any such practices will not be tolerated in their supply chains.

Other sources

Where will tomorrow’s supply come from and will the role of the DRC eventually diminish? Will Tesla achieve its goal of a North American supply chain for its key metal inputs?

Mining exploration companies are already looking at regions like Ontario, Idaho, British Columbia and the Northwest Territories to find tomorrow’s deposits.

Ontario: Ontario is one of the only places in the world where cobalt-primary mines have existed. This camp is near the aptly named town of Cobalt, which is located halfway between Sudbury, the world’s nickel capital, and Val-d’Or, one of the most famous gold camps in the world.

Idaho: Idaho is known as the Gem State while also being known for its silver camps in Coeur d’Alene—but it has also been a cobalt producer in the past.

B.C.: The mountains of B.C. are known for their rich gold, silver, copper, zinc and met coal deposits. But cobalt often occurs with copper and some mines in B.C. have produced cobalt in the past.

Northwest Territories: Cobalt can also be found up north, as the NWT becomes a more interesting mineral destination for companies. One hundred and sixty kilometres from Yellowknife, a gold-cobalt-bismuth-copper deposit is being developed.

Posted with permission of Visual Capitalist.

B.C. buys coal licences to resolve aboriginal dispute

May 5th, 2015

by Greg Klein | May 5, 2015

In an effort to placate a native band, Fortune Minerals TSX:FT and POSCO Canada have sold their British Columbia coal licences to BC Rail, a provincially owned railway company without a railway. Announced May 5, the $18.3-million sale of 61 claims totalling 16,411 hectares in northwestern B.C. contains a 10-year buy-back option should the Tahltan First Nation agree to development of the Arctos anthracite project.

B.C. buys coal licences to resolve aboriginal dispute

A 2013 company photo shows environmental field work underway.
As project operator, Fortune continues with land reclamation at Arctos.

Calling the deal a good outcome in the current market, Fortune president/CEO Robin Goad said the joint venture “invested significant funds” to try to resolve the band’s concerns. “Mining is a cyclical industry and, considering the weak metallurgical coal prices at the present time, it was considered prudent to step back from Arctos and focus our efforts on our near-term production assets.”

A PwC report on B.C. mining, also released May 5, noted that steelmaking coal now trades around $100 per tonne, “a considerable drop from its record price around $330 in 2011.” The report quotes Don Lindsay of Teck Resources TSX:TCK.A and TCK.B saying prices can’t recover without further production cuts around the world.

Fortune and the South Korean steel producer subsidiary will divide the proceeds evenly, with Fortune allocating its share to working capital and debt repayment. The company operates the Revenue silver mine in Colorado and holds the proposed NICO gold-cobalt-bismuth-copper mine in the Northwest Territories, along with exploration projects in the NWT.

CN TSX:CNR took over BC Rail’s railway system in 2004 in a highly controversial $1-billion deal that the province insisted was a lease, not a sale. Once the deal was complete, the BC Liberal government acknowledged the lease would run for 990 years. Corruption allegations and a police raid on B.C.’s legislature followed. In 2010 the province paid $6 million in legal bills for two government aides who pleaded guilty to corruption-related charges.

Although BC Rail no longer has a railway to run, the government kept the Crown corporation intact with management, board of directors and staff responsible for maintenance of a 40-kilometre spur line and property sales.

“It’s a new NWT”

October 7th, 2014

Miners welcome the Northwest Territories’ plans to encourage investment

by Greg Klein

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His tone sounded taunting, if only slightly so. While attending a meeting of resource politicos in Sudbury last August, Northwest Territories minister of Industry, Tourism and Investment David Ramsay told the Globe and Mail that the NWT’s “Ring of Ice” has resources to rival Ontario’s Ring of Fire. The huge difference, of course, is that the Ring of Fire remains all but inaccessible while the NWT’s riches have already been opened up. Now the territory has taken specific measures to emphasize it’s open for business.

That came through in the first annual implementation plan of the NWT’s Mineral Development Strategy. And the plan drew praise in an October 6 announcement from the NWT and Nunavut Chamber of Mines. The organization sees last April’s devolution of federal responsibilities for land, water and resources to the territory as a turning point for the industry. “The legislature has said mining development has big consequences for our government now,” chamber executive director Tom Hoefer tells ResourceClips.com. “So it’s saying we’re going to be more nimble on our feet, we’re going to encourage economic development.”

Miners welcome the Northwest Territories’ plans to encourage investment

The NWT has done so by setting ambitious goals, some with established budgets and target dates, on a number of fronts including energy, transportation and a “new leading edge Mineral Resources Act.” That marks a major departure from past practice, according to Hoefer.

“We’ve suffered a loss of reputation over probably the last seven years. If you look at our exploration figures during that period you can see our investment just flatlined. We saw Yukon, Nunavut and the rest of the world getting huge investment. We languished.”

Indeed, last year’s Fraser Institute Policy Perception Index placed the NWT nearly halfway down a list of 112 jurisdictions globally and sixth on a list of 12 Canadian jurisdictions.

“A big piece of this was the regulatory front,” Hoefer explains. “It was getting very complex, in part because we had a number of different land claim groups and that created a number of different regulatory boards. So the federal government launched a northern regulatory improvement initiative in 2009 and that culminated in amendments to the Mackenzie Valley Resource Management Act.” That was completed shortly before last April’s devolution milestone.

The NWT considers those amendments a starting point for a new regulatory environment. But the government’s not promising rapid reform. Calling this a “time of transition and learning,” the territory has come up with the slogan “devolve then evolve.” Still, it’s stated intentions to provide clear, concise documentation and to guide companies through regulatory processes and aboriginal engagement.

The territory already leads Canada in at least one respect, Hoefer maintains. “I’d say we’re probably a leader in the country for settling land claims. That helps provide more certainty.”

Devolution also brings the territory 50% of the royalties that once went solely to the feds. Aboriginal groups that signed onto the devolution agreement get 25% of the territory’s share, Hoefer says.

With grants announced just last week, a new mining incentive program has awarded a total of $396,000 to two prospectors and six exploration companies.

“A new and easier-to-use web portal for discovery and dissemination of geoscience information” will get $1.3 million over two years.

But that’s small change compared to price tags for infrastructure. Although money hasn’t been allocated yet, the NWT’s talking about a three-year, $31-million energy program and a 10-year, $200-million transportation plan.

None of the territory’s four existing mines connect to the grid. Only North American Tungsten’s (TSXV:NTC) CanTung operation has year-round road access—and that links to the Yukon.

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Diversified, De-risked, Undiluted

October 11th, 2011

Fortune Seeks Partners as it Moves to Production

By Greg Klein

With two projects slated for production within 12 months of each other, the year 2014 should be a big one for Fortune Minerals Ltd TSX:FT. The projects are diverse—gold, cobalt, bismuth and copper at NICO in the Northwest Territories and anthracite coal at Mount Klappan in northwest BC. Both projects have been test-mined. Much of the infrastructure is either in place, on its way or in storage. Additionally, as President/CEO Robin Goad explains, the company intends to recruit deep-pocketed partners to reduce equity dilution.

Last August, Fortune teamed up with South Korea’s POSCO in a JV that gives the world’s third-largest steel producer a 20% interest in Mount Klappan. Fortune gets an estimated $181 million in return, with $30 million up front, to develop the mine and a rail connection. POSCO will fund 20% of operating costs and receive 20% of production from one of the world’s largest undeveloped anthracite deposits.

Fortune Seeks Partners as it Moves to Production

Mount Klappan’s four deposits total 107.9 million tonnes coal measured, 123 million tonnes indicated and 359.5 million tonnes inferred. Its Lost Fox deposit has a reserve of 85.6 million tonnes proven and 16.1 million tonnes probable. After wash-plant processing, that reserve translates into 51.6 million tonnes proven and 9.2 million tonnes probable reserves of the 10% ash pulverised coal injection (PCI) product used in steelmaking.

Last November’s feasibility study projects a $768.4-million CAPEX for the first four years of a minimum 20-year lifespan for an open pit producing an initial three million tonnes a year.

Based on a price of $175 per tonne PCI, the study projects a pre-tax IRR of 25.4% and an 8% discounted NPV of $1 billion. At $300 a tonne, the study projects a pre-tax IRR up to 60.2% and an 8% discounted NPV up to $ 3.8 billion.

The transportation plan entails building tracks on an existing CN rail bed to the main line 150 kilometres away, which connects with the Ridley Coal Terminal at Prince Rupert, gateway to Asia.

Electricity should be on its way to the region, with BC Hydro’s 344-kilometre transmission line expected for completion in 2013.

“Our POSCO agreement puts money in place to take Mount Klappan through permitting, detailed engineering and some additional work,” says Goad. “At the same time we’re working closely with the community, where we have very significant support, and on finding an additional minority partner that will fund the project into commercial operation.”

Fortune seeks a JV partner for NICO too. “Our plan is to fully finance both projects right through to commercial operation with minimal equity dilution,” he explains.

NICO has underground and open-pit proven and probable reserves of 907,000 ounces gold, 82 million pounds cobalt, 109 million pounds bismuth and 27 million pounds copper. The project’s 2008 feasibility study, however, is out of date.

“We’re now completing front-end engineering and design. We’re going to come out with a new financial model, and we’ll have a new reserve estimate coming out very shortly. At the same time, we’re completing the permitting process and working very hard on community engagement.” Goad says.

A key aspect of the project is the plan to ship concentrate to the company’s refinery in Saskatchewan. “NICO will be using a very simple flotation concentration process to reduce 4,650 tonnes of ore per day to only 180 tonnes of concentrate. That means only five truckloads of material, just 3.7% of the original mass, will leave the NICO site for Hay River each day. That’s a critical economic attribute.”

Both projects have been test-mined; both projects have been assessed in positive bankable feasibility studies; both have been pilot-plant processed —Robin Goad

From Hay River, concentrate will travel by rail to Fortune’s Saskatchewan Metals Processing Plant near Saskatoon. The refinery will offer much lower costs for power, production and labour than could be found in the NWT.

At this advanced stage, NICO might be described as a mine in waiting. It’s also a mine in storage. Fortune has bought and dismantled Newmont’s TSX:NMC Golden Giant Mine buildings, metallurgical labs and other infrastructure, with the intention of shipping and reassembling them at NICO. Goad says the Golden Giant transplant offers another de-risk benefit.

“The Tlicho [aboriginal] government is generally very supportive of our project,” Goad says. The environmental review is progressing as well. “We just completed a conformity check on our developments assessment report [with the NWT Mackenzie Valley Review Board], and I think we’re the first company in history to have zero deficiencies.”

About 24 kilometres from NICO sits a possible satellite project, Fortune’s Sue Dianne Deposit. It hosts an indicated 43-101 of 149.1 million pounds copper, 19,000 ounces gold and 855,000 ounces silver, with an inferred category of 28.3 million pounds copper, 3,600 ounces gold and 122,000 ounces silver.

Goad concludes, “Both projects have been test-mined; both projects have been assessed in positive bankable feasibility studies; both have been pilot-plant processed. We’ve done things like buy the Golden Giant mine to reduce risks. We’ve not only offer compelling value, but we’ve done a lot to reduce risk in terms of diversifying our assets and the work that we’ve conducted to advance both projects.”

At press time Fortune had 110.79 million shares outstanding at $0.82 a share for a market cap of $90.85 million.