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Feb 12, 2019 BMO Global Commodities Research. Excerpt: 

Apple iPhone sales in China dropped 20% y/y throughout the final quarter of 2018 as macro headwinds and the steady rise of domestic rivals saw Apple’s market share slip from 12.9% to 11.5%. While Apple no longer provides a breakdown of iPhone sales, data from IDC shows a significant increase in smartphone sales produced by Huawei, which saw Q4 2018 sales increase 23.3% y/y. Despite solid growth throughout 2018 and a bullish outlook for EV’s over the coming years, as highlighted in this recent special report, smartphones, tablets and laptops still account for the largest share of cobalt demand, forecast at 37% of total demand this year. As such any significant slowdown in smartphone sales could present near-term headwinds for cobalt prices given the current low base of EV penetration rates.

 
Cobalt
 
Reuters US News - February 12, 2019
LONDON (Reuters) - Cobalt’s near year-long price slide is finally coming to an end, but high inventories of the battery metal will stop prices quickly re-claiming 2018’s 10-year highs. London Metal Exchange prices have crashed to two-year lows of $32,000 a tonne compared with levels near $100,000

Cobalt’s near year-long price slide is finally coming to an end, but high inventories of the battery metal will stop prices quickly re-claiming 2018’s 10-year highs…The drop was sparked by rising supplies from the artisanal and industrial sectors in the Democratic Republic of Congo and a surplus of cobalt chemicals, used to make rechargeable batteries to power electric vehicles, in top consumer China…“High cobalt prices encouraged new supplies last year. Artisanal mining supply has exhibited enormous growth in recent years to bridge the gap between supply and demand,” said CRU analyst George Heppel. “However, artisanal mining supply has declined in the past six months due to lower payables and the falling cobalt price. Artisanal is the swing producer in the cobalt market.”…Cobalt hydroxide prices are typically a percentage of the metal price known as payables and hit levels above 90 percent last year. They have since slipped to around 65 percent…CRU estimates supplies of cobalt from Congo’s artisanal sector jumped to 24,000 tonnes last year from 19,100 tonnes in 2017 and 10,500 tonnes in 2005, when prices hit 12-year lows below $10 a lb…Rising supplies are also expected from higher output at projects such as Glencore’s Katanga mine, expected to produce 26,000 tonnes this year from 11,000 tonnes last year…Eurasian Resources Group plans to increase cobalt output at its Congo Metalkol facility to 20,000 tonnes annualized by end-2019 and 24,000 tonnes soon after…Over the longer term though demand is expected to outpace supply…Analysts expect cobalt demand at about 185,000 tonnes by2023 with about 35 percent of that accounted for by the electric vehicle battery sector compared with last year’s 125,000 tonnes and 20 percent respectively.

 
S&P Global Platts - February 11, 2019
London — Cobalt, a key component in electric vehicle batteries, could come under further downward pressure as supply grows and...
macro, the headwinds to cobalt have been heavily influenced by rising supply for instance from artisanal miners in the Democratic Republic

Cobalt prices had a rollercoaster year in 2018, starting at $35/lb, peaking at $43.70/lb in April, and ending the year at $26.50/lb. Volatility was the highest since 2008…"Beyond macro, the headwinds to cobalt have been heavily influenced by rising supply for instance from artisanal miners in the Democratic Republic of Congo [the world's biggest supplier]," the investment bank added…"Glencore's cobalt output came in at 42,000 mt, 19% above our forecast, with strong output at both Katanga and Mutanda, beating the upper end of the annual guidance of 37,000-41,000 mt," BMO analyst Colin Hamilton said…There is "no shortage of potential supply but there could be a lack of mining investment to extract it," Eurasian Resources Group marketing director of copper and cobalt African sales, Giles Smith, said…A senior Japanese trader agreed that there was not a lack of cobalt. Instead, there was a lack of trust and transparency regarding the supply chain from the DRC, he said, adding that this needed to be addressed…The Bank of America Merrill Lynch note went on to say that: "We note that cobalt substitution continues, also because car producers are wary of relying on cobalt supply from the DRC, which has been politically unstable periodically. Putting it all together, we forecast cobalt demand increases, which suppliers should however be able to feed near-term."

 
Financial Times - February 11, 2019
It is one of Australia’s oldest mining towns that has built its wealth from a huge deposit of silver, lead and zinc. Now, Broken Hill is...

…lured by forecasts that demand for cobalt — the main power source for mobile devices and electric vehicles (EVs) — will quadruple by 2029. Supply concerns have further stoked their interest as two-thirds of the world’s cobalt is mined in the Democratic Republic of Congo, a poor country that suffers from political instability and corruption and which has been criticised for the use of child labour in its artisanal mines….Last year Kinshasa’s dominance over the cobalt supply chain rose above 70 per cent as Chinese-owned mines in the DRC and new entrant Eurasian Resources Group, a Luxembourg-based miner, ramped up production. It is expected to hit 75 per cent this year, according to Darton Commodities. “The DRC is to the cobalt world what Saudi Arabia is to oil when it comes to availability of supply, there’s no where else where you can get large volumes like you can in the Congo,” said George Heppel, an analyst at consultancy CRU…Asian battery makers are now building alliances with miners in Australia. Last year LG International, the investment arm of the South Korean battery maker, bought a 6 per cent stake in Cobalt Blue. Shanghai Pengxin, a Chinese conglomerate, paid A$81m ($57m) for a 16 per cent stake in Clean TeQ, an ASX-listed company also aiming to develop a nickel-cobalt-scandium mine about 350km west of Sydney… “There will be no shortage of cobalt but we’re going to have better cobalt and nickel prices to get the mines [outside the DRC] built,” said Anthony Milewski, chief executive of Cobalt 27…

 
 
EVs
 
News - MSN CA - February 12, 2019
electric vehicles last year. There’s a lottery system to significantly restrict sales of internal-combustion vehicles in China, but EVs can

As the Chinese government continues to push for more EVS, its influence on the global vehicle market can’t be overstated…China sold about 1.25 million electric vehicles last year. There’s a lottery system to significantly restrict sales of internal-combustion vehicles in China, but EVs can be readily purchased by Chinese buyers…An said that there are currently approximately 400 EV start-ups operating in China…But because it’s incredibly easy for EV start-ups to get major government support, there’s a mad rush to try to compete against the big domestics and the foreign automakers about to enter the Chinese market…“Every city hopes to create jobs. There are 40 new EV makers in the last year or so, and each one can get a billion dollars,” said An. “That’s even if the companies and the funders don’t believe they will be successful in the long run.” He explained that most of the start-ups want to quickly flip the companies to a new investor – before China’s economy slows down…So when you hear about Chinese Internet entrepreneurs and venture capitalists starting EV companies, realize that the money really comes from the Chinese government. “If you trace the venture money, it all comes from the government side,” said An. He explained that many regional governments raise money by selling land. The proceeds are invested in emerging technologies like EVs, but there is almost no concern for getting a return on investment…The 400 or so current EV companies will get winnowed down to perhaps a dozen in the next few years, according to An…“I think it’s good for EVs,” he said. Just like previous oversized Chinese investments in solar panels and wind turbines, the market for electric vehicles and EV batteries will benefit…“It will bring down the cost of EVs and batteries.”

 
 
fortuneminerals
For further information about the NICO Project and its Mineral Reserves, please refer to the Technical Report on the Feasibility Study for NICO, entitled "Technical Report on the Feasibility Study for the NICO-Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada", dated April 2, 2014 and prepared by Micon, which has been filed on SEDAR and is available under the Company's profile at www.sedar.com.

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