CLA - Cobalt related news, page-2445

Benchmark Mineral Intelligence head of forecasting Andy Leyland told the company's Cape Town World Tour stop this week that the electric vehicle market was well and truly booming.

"This is an industry that's starting to stand on its own," he said.

Carmakers have committed US$300 billion of investment, while battery makers have committed $110 billion.

Around 69 battery megafactories are planned at an average cost of $1.5 billion each.

"That part of the supply chain is happening and finding it quite easy to attract financing," Leyland said.

"Mining investment is harder because people don't understand it."

Benchmark estimates $24 billion of investment between now and 2030 is still required in the lithium sector to meet demand.

"A lot of investment still needs to go into the lithium supply chain," Leyland said.

Lithium demand has an estimated compound annual growth rate of 18.1% out to 2030, comprising a "run of the mill" 2% for non-battery usage and 21.4% for batteries.

Leyland said there were quality and consistency issues with lithium, with specifications tightening from parts per million impurities to parts per billion.

"This is an industry where tolerance is getting stricter and stricter," he said.

According to Leyland, graphite is the least understood of the battery metals.

Graphite has a CAGR of 16.6%, with an estimated $13 billion in investment required.

The small cobalt market is a lot more challenging to predict, with Benchmark seeing an 11.4% CAGR.

The level of investment required is more difficult due to the number of copper and nickel projects that produce cobalt as a by-product.

"I absolutely chickened out on putting a number on that," Leyland said.

Aside from price, cobalt also comes with ethical issues.

"The brand cobalt is pretty toxic," Leyland said.

Nickel for use in batteries has a CAGR of 29%.

Benchmark estimates $39 billion on investment is required to meet that demand.

"For people trying to finance nickel projects, the biggest issue is the historical price over the past three and a half years," Leyland said.

Exacerbating the potential supply gap is the fact that major miners favoured copper investment over nickel.

BHP sees its Nickel West division as non-core, while Glencore and Vale have been burned by large nickel investments in New Caledonia.

At Mining Indaba last year, Rio Tinto said it was keen to add nickel to its portfolio. Since then, it has waded into the sector via an exploration joint venture with Sipa Resources in Uganda.