NetworkNewsWire
Editorial Coverage: Supply anxieties and ethical concerns are
clouding the otherwise seemingly sunny drive to automobile
electrification. The world is already awash in mobile devices and
is rapidly moving to enhanced electrical grids and electric vehicle
(EV) ubiquity. However, the indispensable lithium-ion (Li-ion)
battery — vital for gadgets, grid storage and electric propulsion —
also requires cobalt to retain and discharge electricity. Lithium
is plentiful and easily mined; cobalt is the conundrum that has
manufacturers of battery-dependent products most worried.
- EV sales projected to explode to 30 million units by 2030.
- Cobalt — critical for Li-ion batteries — is nearly
single-sourced and ethically challenged.
- New North American supply chains look to provide solutions
Most of the world's cobalt supply comes from the Democratic
Republic of Congo. The DRC has an unstable and historically corrupt
government and an exceptionally poor human rights record;
additionally, much of the country's cobalt is mined by hand, often
by children. Economically precarious, cobalt is
virtually single-sourced. Currently about two-thirds of the
world supply and half of all global reserves come from the DRC.
Moreover, two years after Amnesty International’s scathing expose that showed exploited children mining
cobalt, child labor is still being used to procure the mineral at
so-called artisanal mines. No other comparable commodity is so
dominated by a single source, creating enormous potential risk for
EV makers. The troubling aggregate of political corruption, supply
uncertainty, operational complexity and ethical opacity has
delivered a clarion call to EV makers and spurred a global quest
for secure and humanely sourced cobalt resources. At the vanguard
of this search is First Cobalt Corp. (TSX.V: FCC) (OTCQX:
FTSSF) (FTSSF
Profile), a vertically integrated pure-play cobalt
company with significant North American assets. Leveraging company
assets and expertise in conjunction with the savvy of a legendary
EV pioneer, First Cobalt is determined to be North America’s
premier source of cobalt delivered to global electric automakers
like Ford Motor Company (NYSE: F), B.M.W.
AG ADR (OTC: BMWYY), Volkswagen AG (OTC:
VWAGY) and Mercedes maker Daimler AG (OTC: DDAIF)
(XE: DAI).
To view an infographic of this editorial, click here.
Eye-popping Expectations
Global electric vehicle sales are projected to grow at a
staggering CAGR of 32.57
percent over the next seven years. Forecasts from Bloomberg NEF show sales of electric vehicles
increasing even faster after that. From a record 1.1 million sales
worldwide in 2017, sales are projected to reach 11 million in 2025
then skyrocket to 30 million in 2030 as the vehicles become cheaper
to make than internal combustion engine cars. It’s difficult to
fathom a 10-fold increase in electric vehicles in seven years and
even harder to comprehend a 30-fold increase in 12 years, but
somewhere between the current market and a 30-fold increase is one
heck of an opportunity.
Conflict and Conundrum-free Cobalt
The DRC’s artisanal mining volume was reduced when battery
makers and users came under public pressure to fully vet supply
chains, but unabated global demand pushed cobalt prices to new
highs, and backyard mine production rebounded. Even with intense
scrutiny and vetting, it’s nearly impossible for battery makers to
ascertain cobalt sources. More than half of the global supply of
refined cobalt chemicals used in Li-ion batteries comes from China,
which in turn gets 90 percent of its cobalt from DRC.
There’s an ever-rising chorus from EV makers clamoring for
secure, ethically sourced cobalt. As part of a collective response
to these concerns, First Cobalt
Corp. (TSX.V: FCC) (OTCQX: FTSSF) adopted the Responsible Cobalt Initiative in 2017 and is intent on
building — from raw product to refined chemicals — a North
American-based, vertically integrated cobalt company.
First Cobalt owns three substantial North American assets. The
company’s flagship asset is the Iron Creek Cobalt Project in Idaho,
which has an inferred mineral resource estimate of 29.6 million
tons grading 0.11 percent cobalt equivalent. First Cobalt also
controls a prodigious land package composed of 50 past-producing
mines in the Canadian Cobalt Camp and, importantly, the company
owns the only permitted cobalt refinery in North America capable of
producing battery-grade materials.
The validation and value of assets are likely bolstered by the
recent appointment of automotive icon, Henrik Fisker, to the First Cobalt’s Board of
Directors. Fisker, a legendary designer and entrepreneur renowned
for making dreams reality, brings a wealth of knowledge, innovation
and real-world experience to First Cobalt’s board. Henrik’s vision
is behind some of the most emotionally appealing vehicles ever
created, including the BMW Z8, the Aston Martin DB9/V8 Vantage, VLF
Force 1 to the Fisker Karma and more. Fisker is the founder,
chairman and CEO of Fisker Inc., an
American automaker revolutionizing the development of EVs with
innovative battery solutions.
“Electric vehicle automakers and battery manufacturers have a
responsibility to ensure any materials we
use in our batteries are sourced in an ethical way,” Fisker stated
in the news release
announcing his appointment. “I have made a commitment to
contribute to a better world all the way down the supply chain. We
must stop looking at innovation superficially and start taking
responsibility for our products end to end and give our customers
the true choice to be part of a sustainable future.
“During this last few weeks, I have spent considerable time with
the First Cobalt team, seeing their cobalt project, Iron Creek, in
Idaho as well as the First Cobalt Refinery in Ontario,” he
continued. “I was extremely impressed with the depth and extent of
commitment from the entire First Cobalt team to the safety and
training of all employees, ethical mining practices and the focus
on environmental protection around their projects.”
First Cobalt President and CEO Trent Mell praised Fisker’s
experience and potential for advancing future developments.
“First Cobalt’s strategy is to explore, mine and refine cobalt
material in North America with the goal of providing cobalt to the
American EV market,” Mell stated. “Henrik’s knowledge of the EV
space and experience as a successful OEM automotive manufacturer
will play a key role as First Cobalt continues to execute on this
strategy. The vision and energy that Henrik has demonstrated
throughout his career will be an important asset as the Company
continues to develop its projects in North America.”
Throughout his career in the automotive sector, Fisker has
become synonymous with iconic cars and groundbreaking leadership in
premium electric vehicle development. His vision and innovation are
behind some of the most emotionally appealing vehicles ever
created, and now he’s sharing that vast expertise with First Cobalt
in the development of a unique North American cobalt supply
chain.
Validating Historic Estimates
To substantiate assets and solidify objectives, First Cobalt
recently announced a mineral resource
estimate of 29.6 million tons of 0.11% cobalt equivalent at the
Iron Creek Project. Unlike almost all other cobalt mines, First
Cobalt’s Iron Creek Project is primarily a cobalt deposit with
copper as the byproduct.
“The initial resource estimate and the pace of progress at Iron
Creek have exceeded our expectations,” Mell stated. “We have
delineated a sizeable primary cobalt deposit on patented property,
and mineralization continues to expand to the east, west and at
depth. The mineralogy is simple, and initial metallurgical test
work is very encouraging with high metal recoveries. Cobalt is
associated with pyrite rather than minerals containing arsenic,
which may offer processing and offtake advantages.”
Mell also stated, “This initial Inferred Resource estimate is an
important step forward to a potential source of ethical cobalt in
America. Drilling is now underway to test the mineralization strike
length from 450 meters to over 900 meters, while also
systematically testing depth extensions to over 300 meters to
support an updated resource estimate in early 2019.”
The Iron Creek property consists of mining patents and
exploration claims covering almost 1,700 acres with significant
infrastructure in place to support multiple drills and underground
activity. With a strong balance sheet, First Cobalt is fully funded
to complete the 2018 exploration programs and plans to be at the
forefront of the cobalt-driven battery revolution.
The Insight
If there are any doubts about an EV explosion, look at any major
auto manufacturer — every single one is rapidly expanding product
lines and production of electric vehicles. Electric mobility is
still in its infancy, but even with challenges and speed bumps
ahead, it won’t end any time soon. Well-positioned portfolios in
strategic critical components of EVs could easily excel and
outperform well into the next decade.
EV Makers
Automotive icon Ford Motor Company (NYSE: F)
designs, manufactures, markets and services a global line of Ford
cars, trucks, SUVs and electrified vehicles. Ford has already
invested $11 billion to bring 16 fully electric vehicles into a
global portfolio of 40 electrified vehicles by 2022 and is
aggressively pursuing leadership positions in electrification,
autonomous vehicles and mobility solutions. Ford’s Team Edison focuses exclusively on development of
electrified vehicles for both Ford and Lincoln.
B.M.W. A.G. ADR (OTC: BMWYY) is among the
world’s leading manufacturers of automobiles and motorcycles and
plans to offer 25 electrified
vehicles — 12 fully electric by 2025. BMW has established
ecological and social sustainability throughout the value chain and
a commitment to conserving resources as an integral part of its
strategy. BMW is trying to secure a 10-year supply
of cobalt — all the way down to the level of the mine — for EV
batteries.
Volkswagen AG (OTC: VWAGY), one of the world’s
biggest automakers, has one of the industry’s most ambitious
targets for battery car sales. Volkswagen outlined its strategy to
electrify all segments of its vehicle lineup across the globe and
to become a worldwide industry leader in e-mobility by 2018.
Volkswagen is actively seeking long-term
cobalt supplies.
Daimler AG (OTC: DDAIF) (XE: DAI) engages in
the production and distribution of cars, trucks and vans. The
company’s flagship brand, Mercedes-Benz, announced a full line of
electric cars called the Mercedes EQ, set to market in 2020.
Daimler has vowed to ethically source battery materials for
electric cars and recently joined the Responsible
Cobalt Initiative, which seeks to find ethical ways to source
the material.
For more information about First Cobalt Corp, please visit
First Cobalt
Corp. (TSX.V: FCC) (OTCQX: FTSSF)
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