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Excerpt from May 15, 2018 BMO Metals Brief:

We have been highlighting that a major headwind to cobalt demand has been weak smartphone sales (which are still the single biggest end use of cobalt), which have fallen y/y for six consecutive quarters. However, there is some potential that the Chinese market has started to turn. The China Telecommunication Research Institute, a government affiliated think tank, reported the first positive y/y month in six for sales in April, rising 6.5% y/y. However, cumulative sales from January to April dropped by 6.7% y/y. Today sees the annual Cobalt Institute conference in Hong Kong, which should give a good indication of industry sentiment.

 
Cobalt
 
Metal Bulletin - May 14, 2019
As cobalt market participants head to Hong Kong for the Cobalt Institutes’ annual conference on May 15-16, Fastmarkets summarizes the key...
that it is impossible to realize a cobalt supply chain without the Democratic Republic of the Congo, necessitating clarity and agreement on

As it stands, standard-grade cobalt prices are up 22% since the end of March..Activity has subsided after buyers covered their immediate requirements, and market participants are now anticipating the summer season, typically marked by weaker demand translating into weaker prices…On one hand, metal sits in tighter hands than in the first quarter of the year, and some producers are believed to be sold out until the end of the year. On the other, underlying hydroxide stocks are high, and Chinese sulfate buying is hesitant, both of which are still putting pressure on the cobalt complex as a whole…How will automakers lock in their cobalt supply? While a forecast hydroxide surplus looks likely to keep cobalt prices in check in 2019, the longer-term picture for cobalt consumption still looks strong once electric vehicle adoption ramps up in the next three or so years…Automakers are, as BMW’s recent deal to buy CTT and Murrin Murrin metal shows, contending with ethical red flags along parts of the cobalt supply chain, adding complexity to their procurement programs…Scope for other carmakers to take a similar approach is limited, and it is agreed that it is impossible to realize a cobalt supply chain without the Democratic Republic of the Congo, necessitating clarity and agreement on what constitutes responsible sourcing…Will 5G reshape the cobalt tetroxide market in the near term?...With several mobile phone providers starting to develop mobile phones that support the fifth generation (5G) of cellular network technology, market spotlight has been cast on high-voltage cobalt tetroxide which is essential to produce the lithium cobalt oxide (LCO) battery required by 5G mobile phones…Meanwhile, the majority of cobalt tetroxide produced currently can only serve fourth generation (4G) mobile phones, therefore, the development of 5G mobile phones is like to reshape the cobalt tetroxide market as producers shift to high-voltage cobalt tetroxide production…That said, it is still uncertain when such a change may take place extensively in the market due to the bottleneck of mobile phone safety performance and higher production cost for high-voltage LCO batteries, according to market participants.

 
Metal Bulletin - May 14, 2019
Increased hydroxide supply over the past year has meant diverging fundamentals between cobalt intermediates and cobalt metal. Chinese...
over the past year has meant diverging fundamentals between cobalt intermediates and cobalt metal. Chinese buyers moved to the spot market

Increased hydroxide supply over the past year has meant diverging fundamentals between cobalt intermediates and cobalt metal…Buyers and sellers continue to prefer short-term supply agreements for cobalt hydroxide. Consumers are agreeing purchases for around one month’s supply each time, but for a maximum of three months ahead in most cases, market sources said…Payables – the percentage of Fastmarkets’ cobalt price paid to procure cobalt hydroxide – have fallen from 85-90% of the standard-grade low at the beginning of last year, to 67-69% as of the end of April…For buyers, a more flexible, hand-to-mouth approach to buying, also reduces their obligation to take on units in an environment where demand from the battery and electric vehicle sector is still ramping up…Some consumers have indicated a preference to price their hydroxide units on the basis of a cobalt sulfate reference price, though some are concerned sulfate prices are more a reflection of Chinese sentiment than its fundamentals…“If the cobalt sulfate price is really lower [compared to the cobalt metal benchmark price], market participants would want to change the basis of the pricing,” she added…Fastmarkets’ cobalt sulfate adjustment to its standard-grade cobalt price (low-end) on a full metal basis was at a discount of $1.89-2.47 per lb on Friday May 10, compared with a discount of $0.75 to a premium at $0.13 per lb a month ago. 

 
Metal Bulletin - May 15, 2019
Authorities in the Democratic Republic of Congo (DRC) are considering the possibility of agreeing a “good, fixed price” for its artisanal...
is dependent on price conditions. “Right now, artisanal miners get 10% of the London Metal Exchange [cobalt] price [but] why should it be

Authorities in the Democratic Republic of the Congo (DRC) are considering the possibility of agreeing a “good, fixed price” for its artisanal cobalt producers, according to Paul Mabolia from the country’s ministry of mines…The DRC could scale up its cobalt production capacity to almost 200,000 tonnes per year by 2025 should certain factors, including sustainability of supply, be addressed, Mabolia told delegates at the Cobalt Institute’s conference in Hong Kong this week. Some of that scale up is dependent on price conditions. “Right now, artisanal miners get 10% of the London Metal Exchange [cobalt] price [but] why should it be 10%?” 

 
Materials Today - May 15, 2019
The warmth coming off your computer or cell phone represents wasted energy radiating from the device. With automobiles, it is estimated...
and in water separation technologies, cobalt oxides possess the unique ability to accept substitute transition metal cations, which allows

The warmth coming off your computer or cell phone represents wasted energy radiating from the device. With automobiles, it is estimated that 60% of fuel efficiency is lost due to waste heat. Is it possible to capture this energy and convert it into electricity?...Koneru believes that, in cobalt oxide, he may have found the right material to harness this effect for energy production. An inorganic compound that is used in the ceramics industry to create blue-colored glazes and in water separation technologies, cobalt oxides possess the unique ability to accept substitute transition metal cations, which allows them to be mixed with nickel, copper, manganese or zinc. These metals have magnetic properties that can increase the separation between electrons spinning up and down, and improve the conversion of heat to electricity.

 
 
EVs & Energy Storage
 
Unknown - May 15, 2019
Volvo Car Group has signed long-term agreements with leading battery makers CATL and LG Chem to ensure the multi-billion dollar supply of lithium ion batteries over the coming decade for next generation Volvo and Polestar models.

In 2017 Volvo Cars made the industry-leading commitment that all new Volvo cars launched from 2019 would be electrified. The company has since reinforced this strategy, by stating that it aims for fully electric cars to make up 50 per cent of its global sales volume by 2025…“With today’s agreement we effectively secured our battery supply for the upcoming decade,” said Martina Buchhauser, senior vice president for procurement at Volvo Cars. “By having two suppliers available in each region we also ensure that we have flexibility in our supply chain going forward.”...Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 642,253 cars in 2018 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010…Founded in 2011, Contemporary Amperex Technology Ltd. (CATL) develops and manufactures Lithium-Ion batteries for e-mobility as well as energy storage solutions…The annual sales volume of CATL in 2018 is 21.31 GWh…With over 20 years’ experience of development and production of these batteries LG Chem has established themselves as one of the world’s leading Lithium-ion manufacturers. The company is a primary supplier of lithium batteries throughout the world for the mobile phone and hybrid/electric vehicle industries & Energy Storage System (ESS).

 
Argus Media - May 14, 2019

Chinese lithium battery manufacturer Farasis Energy plans to spend €600mn ($674mn) to build a battery plant in Germany.

The first phase of the plant is expected to start production in 2020 and have a capacity of 6GWh/yr with a future target of 10GWh/yr.

Farasis agreed with German auto producer Daimler in December last year to supply 140GWh of batteries over 2021-27.

Farasis has Chinese plants in Ganzhou city, Jiangxi province and Zhenjiang city in Jiangsu province.

Electric vehicle (EV) battery manufacturers are planning rapid capacity growth, with the four global leaders — Tesla/Panasonic, CATL, BYD and LG Chem — to add over 140GWh/yr in capacity by 2021.

Chinese lithium battery manufacturer Farasis Energy plans to spend €600mn ($674mn) to build a battery plant in Germany…The first phase of the plant is expected to start production in 2020 and have a capacity of 6GWh/yr with a future target of 10GWh/yr…Electric vehicle (EV) battery manufacturers are planning rapid capacity growth, with the four global leaders — Tesla/Panasonic, CATL, BYD and LG Chem — to add over 140GWh/yr in capacity by 2021. This growth will boost global EV battery production capacity to 273GWh/yr by 2021, a rise of 163pc within four years…China produced 304,000 of new energy vehicles (NEVs) during January-March, up by 103pc from a year earlier, while sales rose by 110pc to 299,000 units. The country is forecast to produce and sell 1.5mn NEVs in 2019, according to China's ministry of industry and information technology.

 
Argus Media - May 14, 2019

South Korea's SK Innovation has raised the capacity target for a second electric vehicle (EV) battery plant that it is building in Hungary and has approved funding for an additional factory in China.

The Hungarian plant will have annual production capacity of 9GWh, rather than the 7.5GWh target that was reported in February.

The Hungarian plant will have annual production capacity of 9GWh, rather than the 7.5GWh target that was reported in February. It will be located in Komarom, near northwest Hungary's border with Slovakia…The company is rapidly expanding its battery business to capitalise on booming demand for EVs. With the larger project scope in Hungary, SK has 38.5GWh of production capacity that is already built or announced. This means the company will still need to build an additional 21.5GWh of capacity by the end of 2022 to meet its 60GWh target for that timeframe, which it reiterated today.

 
The Korea Herald - May 15, 2019
South Korea’s SK Innovation announced Wednesday that it would invest 579.9 billion won ($488.3 million) to build a second electric vehicle...
579.9 billion won ($488.3 million) to build a second electric vehicle battery factory in China, an effort to enhance its presence in the

South Korea’s SK Innovation announced Wednesday that it would invest 579.9 billion won ($488.3 million) to build a second electric vehicle battery factory in China, an effort to enhance its presence in the world’s biggest auto and EV market…According to SK Innovation, the investment decision was made Tuesday during a board meeting. The company did not specify its Chinese partner, the location of the new plant or its production capacity…With its production bases overseas, the company said it expects to have a production capacity of 60 gigawatt-hours by 2022. 

 
Carbon Brief - May 14, 2019
Investment in low-carbon energy sources, such as wind, solar and nuclear, must more than double by 2030 if the world is to meet its Paris...
production capacity of lithium and cobalt will need to expand rapidly to cope with demand for electric vehicle batteries as they continue

Electric cars surge: Continuing a trend that Carbon Brief reported after last year’s IEA report was released, electric car sales are increasing rapidly, as the chart below shows. Global sales approached two million in 2018, up by nearly 70% from just over one million last year…Global Electric Vehicle Outlook 2019….After the strongest year of growth for several years, the overall stock of electric vehicles stood at more than five million at the end of 2018. The IEA reported that the global fleet only exceeded one million as recently as 2015….The upward trend last year was once again largely driven by a single nation – China – as the report explains:…“Over 1.1 million electric cars were sold in 2018, similar to the total number of all cars sold in Mexico that year, and comfortably surpassing all the new cars registered in Africa. While electric car sales increased, overall passenger vehicle sales in China declined in 2018.”…In the same period, 385,000 electric cars were sold in the whole of Europe, the IEA notes, with Norway’s sales now comprising 50% electric models. The US followed closely behind with 360,000 units sold last year. The IEA has previous stated that the production capacity of lithium and cobalt will need to expand rapidly to cope with demand for electric vehicle batteries as they continue their upward trajectory.

 
 
Congo
 
The Africa Report.com - May 14, 2019
Together forever? The DRC's President Félix Tshisekedi and outgoing President Joseph Kabila at Tshisekedi's inauguration ceremony....
is adding to the pressure on the new president. The price of cobalt, the mining of which was the top source of state revenue in 2018, has

Their relationship resembles more of a backroom tug-of-war than outright conflict. The disputed December 2018 election that observers claimed were fraudulent brought oppositionist Tshisekedi to power and gave Kabila’s party a majority in parliament, creating what could be a difficult cohabitation….Here are some of the bones of contention: They have struggled to reach a consensus on the appointment of a prime minister. Sources say they have finally agreed on a name, but they have not announced it yet…The dispute extends to the wider government, as Tshisekedi has the power to appoint the cabinet but ministers must come from Kabila’s party because it controls a majority in parliament. Kabila’s previous appointees are largely still in place to keep things running until the new team is established…Tshisekedi wants to show the world that he is his own man. So, on 5 April, he told his hosts in Washington DC: “I am here to get rid of the dictatorial system that was in place.” This riled Kabila’s Front Commun pour le Congo (FCC), which denounced Tshisekedi’s comments as “gratuitous attacks and unfounded accusations”. But there are no signs yet that Kabila saw this as a declaration of war…In the absence of a formal government, the new team cannot have access to the state budget, which has already been approved. It draws on “special funds”, such as the Fonds de Promotion de l’Industrie and the Fonds National d’Entretien Routier. It has also obtained advances on future income taxes from certain large companies, particularly in the mining and petroleum sector…Tshisekedi’s strategy is not sustainable, and he will eventually have to deal with Kabila loyalists in his government. The country’s economy is adding to the pressure on the new president. The price of cobalt, the mining of which was the top source of state revenue in 2018, has fallen by 50% since the December 2018 election…Kabila has loosened his grip somewhat but remains a major force…Pressure points: Large parts of the Kabila system remained in place. Twenty-two of the twenty-six provinces are led by his coalition. Most of Kabila’s appointees in the security services are still in power. The FCC also has a majority big enough to pass a constitutional revision…Kabila’s parliamentary majority does not offer him total protection, however. The president can dissolve the national assembly after a year in office in the case of a “persistent crisis” with the government…But Kabila has constitutional tools of his own to use against Tshisekedi. Parliament can impeach the president if he fails to respect his duties or is convicted for committing a crime. Politically, it would be tough for Kabila to go after Tshisekedi because he represents change and has the backing of the international community.

 
 
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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The materials appearing in this email contain forward-looking information. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the size and quality of the Company’s mineral resources, progress in permitting and development of mineral properties, timing and cost for placing the Company’s mineral projects into production, costs of production, amount and quality of metal products recoverable from the Company’s mineral resources, anticipated revenues, earnings and cash flows from the Company's mineral projects, demand and market outlook for metals and coal and future metal and coal prices. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the inherent risks involved in the exploration and development of mineral properties, uncertainties with respect to the receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal and coal prices, the possibility of project cost overruns or unanticipated costs and expenses, the possibility that production from the Company's mineral projects may be less than anticipated, uncertainties relating to the availability and costs of financing needed in the future, uncertainties related to metal recoveries and other factors. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update them or revise it to reflect new events or circumstances, except as required by law.