Energy

The Top 10 Reasons Investors Should Look at Cobalt

Published

3 years ago

January 23, 2017

Every once in a while, a previously underappreciated metal rises to prominence.

Several factors can cause this to happen: new technology, changing consumer preferences, supply constraints, or skyrocketing demand can all bring an unknown metal to the forefront of discussion.

Cobalt could be the latest metal that fits this description. It’s a crucial metal to the boom in lithium-ion battery demand, but it also has an increasingly precarious supply chain that could be very volatile moving forward.

Why Investors Should Look at Cobalt

Today’s infographic comes from eCobalt Solutions, a company focused on providing ethically produced and environmentally sound battery grade cobalt salts.

It presents the investment case for the relatively unknown metal.

The Top 10 Reasons Investors Should Look at Cobalt

With the green movement in full swing, there is compelling evidence that cobalt could be the next relatively unknown metal to rise to prominence.

Here are the top 10 reasons that investors should look at cobalt:

1. Cobalt is one of the few metals used for superalloys.

Nearly 20% of all cobalt is used for superalloys – a class of high-tech metals that originally emerged to suit the high operating temperatures of jet engines.

There are three main superalloy types:

Nickel-based: the bulk of alloys produced
Cobalt-based: higher melting point gives ability to absorb stress, and corrosion resistance
Iron-based: the original superalloy, invented prior to the 1940s

Their use has extended into many other fields – and today, superalloys are used in all types of turbines, space vehicles, rocket engines, nuclear reactors, power plants, and chemical equipment.

2. The green economy runs on cobalt.

There are many types of lithium-ion batteries, but the vast majority of li-ions sold today use cobalt in some capacity.

In fact, by 2020 it is expected that 75% of lithium-ion batteries will contain cobalt. Why? It’s because cobalt is the most important metal for increasing the energy density of lithium-ion cathodes.

3. …And green uses such as EVs are driving the upwards trajectory of cobalt demand.

By 2020, almost 1/5 of cobalt demand will stem from electric vehicles.

Total refined cobalt demand:

Year	Demand	% xEV batteries	% Electronics batteries
2010	64,000	<1%	30%
2015	95,000	6%	36%
2020e	124,000	17%	31%

Source: CRU

“Cobalt’s demand growth profile remains one of the best among industrial metals peers. Its exposure to rechargeable batteries continues to play a crucial role.” – Macquarie

4. Getting cobalt is the hard part.

98% of cobalt is produced as a by-product of copper and nickel mines. The problem? If copper and nickel production isn’t growing, then more cobalt isn’t mined to meet demand.

5. Why not find more cobalt?

It’s easier said than done. The vast majority of the world’s cobalt lies in risky regions like the DRC.

Country	% Cobalt Supply in 2014
DRC	58%
Russia	6%
Cuba	5%
Australia	5%
Philippines	4%
Madagascar	4%
Other	19%

Source: CRU

6. And so supply can tighten…

Chemical cobalt – the kind used in batteries, is expected to fall into a growing deficit over the next few years. By 2020, CRU expects that deficit to be at least 12,000 tonnes.

7. Meanwhile, the U.S. government definitely doesn’t have any strategic stockpiles.

According to the U.S Defense Logistics Agency, the government sold off cobalt all the way up until 2008. Now there is only 301 tonnes left in strategic stockpiles.

8. Cobalt was one of the best-performing metals in 2016.

Metal	2016 performance
Zinc	66%
Cobalt	47%
Nickel	17%
Aluminum	17%
Copper	17%
Silver	16%
Gold	9%
Platinum	1%
Uranium	-42%

9. Cobalt prices have been rising, but they are nowhere near all-time highs yet.

All-time highs for cobalt prices happened in 2008, after the DRC government placed restrictions on export of ores and concentrates. For a brief stint, cobalt prices even exceeded $50/lb.

The current price? Roughly $16/lb.

10. Many experts predict the cobalt market to be interesting to watch in 2017:

“Just how much cobalt is in stockpiles in China is the Million Dollar Question. Clarity here can materially affect the cobalt price.” Chris Berry, House Mountain Partners, LLC

“The refined cobalt market will fall into a 3,000 tonne deficit this year following seven years of overcapacity and oversupply. CRU anticipates prices to increase onward into 2017…” – Edward Spencer, CRU Group

“With this growth will come further disruption to the traditional market structures that have developed in cobalt over the last 30 years. In short, a new, more secure supply chain for the modern era will need to be created, a task that includes new mines, new refineries, and a more transparent supply chain.” – Andrew Miller, Benchmark Minerals

Related Topics:green tesla cobalt batteries lithium ion batteries cathode

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Energy

Tesla is Now the World’s Most Valuable Automaker

Thanks to a surging stock price, Tesla is now the world’s most valuable automaker – surpassing industry giants Toyota and Volkswagen.

Published

4 weeks ago

June 16, 2020

Nick Routley

Tesla is Now the World’s Most Valuable Automaker

Even in the midst of a pandemic, Tesla continues to reach new heights.

The company, which began as a problem-plagued upstart a little over 15 years ago, has now become the world’s most valuable automaker – surpassing industry giants such as Toyota and Volkswagen.

This milestone comes after a year of steady growth, which only hit a speed bump earlier this year due to COVID-19’s negative impact on new car sales. Despite these headwinds, Tesla’s valuation has jumped by an impressive 375% since this time last year.

How does Tesla’s value continue to balloon, despite repeated cries that the company is overvalued? Will shortsellers declare a long-awaited victory, or is there still open road ahead?

Tesla’s Race to the Top

Earlier this year, Tesla hit an impressive milestone, surpassing the value of GM and Ford combined. Since then, the automaker’s stock has continued it’s upward trajectory.

Thanks to the popularity of the Model 3, Tesla sold more cars in 2019 than it did in the previous two years combined:

tesla auto deliveries by quarter

As well, the company is taking big steps to up its production capacity.

Austin, Texas and Tulsa, Oklahoma are currently rolling out the incentives to attract Tesla’s new U.S.-based factory. The company is also increasing its global presence with the construction of Giga Berlin, it’s first European production facility, as well as completing the ongoing expansion of its Giga Shanghai facility in China.

Battle of the Namesakes

Tesla’s most recent price bump was fueled in part by a leaked internal memo from Tesla’s CEO, Elon Musk, urging the company’s staff to go “all out” on bringing electric semi trucks to the global market at scale.

It’s time to go all out and bring the Tesla Semi to volume production.

– Elon Musk

Of course, Musk’s enthusiasm for semi trucks isn’t coming from nowhere. Another company, Nikola (also named after famed inventor Nikola Tesla), is focused on electrifying the two million or so semi trucks in operation in the U.S. market.

Although Nikola has yet to produce a vehicle, its market cap has surged to $24 billion – which puts its valuation nearly on par with Ford. Much like Tesla, the company already has preorders from major companies looking to add electric-powered trucks to their delivery fleets.

For major brands looking to hit ESG targets, zero-emission heavy-duty trucks is an easy solution, particularly if the vehicles also live up to claims of being cheaper over the vehicle’s lifecycle. The big question is which automaker will capitalize on this mega market first?

Energy

6 Ways Hydrogen and Fuel Cells Can Help Transition to Clean Energy

Here are six reasons why hydrogen and fuel cells can be a fit for helping with the transition to a lower-emission energy mix.

Published

2 months ago

May 19, 2020

Nicholas LePan

While fossil fuels offer an easily transportable, affordable, and energy-dense fuel for everyday use, the burning of this fuel creates pollutants, which can concentrate in city centers degrading the quality of air and life for residents.

The world is looking for alternative ways to ensure the mobility of people and goods with different power sources, and electric vehicles have high potential to fill this need.

But did you know that not all electric vehicles produce their electricity in the same way?

Hydrogen: An Alternative Vision for the EV

The world obsesses over battery technology and manufacturers such as Tesla, but there is an alternative fuel that powers rocket ships and is road-ready. Hydrogen is set to become an important fuel in the clean energy mix of the future.

Today’s infographic comes from the Canadian Hydrogen and Fuel Cell Association (CHFCA) and it outlines the case for hydrogen.

6 Ways Hydrogen and Fuel Cells Can Help Transition to Clean Energy

Hydrogen Supply and Demand

Some scientists have made the argument that it was not hydrogen that caused the infamous Hindenburg to burst into flames. Instead, the powdered aluminum coating of the zeppelin, which provided its silver look, was the culprit. Essentially, the chemical compound coating the dirigibles was a crude form of rocket fuel.

Industry and business have safely used, stored, and transported hydrogen for 50 years, while hydrogen-powered electric vehicles have a proven safety record with over 10 million miles of operation. In fact, hydrogen has several properties that make it safer than fossil fuels:

14 times lighter than air and disperses quickly
Flames have low radiant heat
Less combustible
Non-toxic

Since hydrogen is the most abundant chemical element in the universe, it can be produced almost anywhere with a variety of methods, including from fuels such as natural gas, oil, or coal, and through electrolysis. Fossil fuels can be treated with extreme temperatures to break their hydrocarbon bonds, releasing hydrogen as a byproduct. The latter method uses electricity to split water into hydrogen and oxygen.

Both methods produce hydrogen for storage, and later consumption in an electric fuel cell.

Fuel Cell or Battery?

Battery and hydrogen-powered vehicles have the same goal: to reduce the environmental impact from oil consumption. There are two ways to measure the environmental impact of vehicles, from “Well to Wheels” and from “Cradle to Grave”.

Well to wheels refers to the total emissions from the production of fuel to its use in everyday life. Meanwhile, cradle to grave includes the vehicle’s production, operation, and eventual destruction.

According to one study, both of these measurements show that hydrogen-powered fuel cells significantly reduce greenhouse gas emissions and air pollutants. For every kilometer a hydrogen-powered vehicle drives it produces only 2.7 grams per kilometer (g/km) of carbon dioxide while a battery electric vehicle produces 20 g/km.

During everyday use, both options offer zero emissions, high efficiency, an electric drive, and low noise, but hydrogen offers weight-saving advantages that battery-powered vehicles do not.

In one comparison, Toyota’s Mirai had a maximum driving range of 312 miles, 41% further than Tesla’s Model 3 220-mile range. The Mirai can refuel in minutes, while the Model 3 has to recharge in 8.5 hours for only a 45% charge at a specially configured quick charge station not widely available.

However, the world still lacks the significant infrastructure to make this hydrogen-fueled future possible.

Hydrogen Infrastructure

Large scale production delivers economic amounts of hydrogen. In order to achieve this scale, an extensive infrastructure of pipelines and fueling stations are required. However to build this, the world needs global coordination and action.

Countries around the world are laying the foundations for a hydrogen future. In 2017, CEOs from around the word formed the Hydrogen Council with the mission to accelerate the investment in hydrogen.

Globally, countries have announced plans to build 2,800 hydrogen refueling stations by 2025. German pipeline operators presented a plan to create a 1,200-kilometer grid by 2030 to transport hydrogen across the country, which would be the world’s largest in planning.

Fuel cell technology is road-ready with hydrogen infrastructure rapidly catching up. Hydrogen can deliver the power for a new clear energy era.