#EV’s set to take World's #Lithium, #Cobalt Markets From Minor to Major

World's Lithium, Cobalt Markets to Go From Minor to Major: BNEF

• Metals are key in batteries that power electric vehicles
• Billions in capital needed to support resource extraction

By Richard Stubbe

(Bloomberg) -- 

The electric-vehicle boom will drive the world's cobalt and lithium markets from minor to crucial by 2030, a report by Bloomberg New Energy Finance concludes.

The two metals, key components in the batteries that power EVs, have doubled in price over the past two years as EV sales have climbed to more than 1 million a year, with 1.59 million expected to be sold in 2018. BNEF analysts Logan Goldie-Scot and James Frith said they expect the markets for cobalt and lithium to adjust to meet demand over the next few years, which will require significant investment to enable smaller companies to find and extract resources.

Lithium prices have topped $20,000 a metric ton in Asia.

Billions in additional capital is needed in the sector. "We expect more direct investment in the upstream supply chain as supply constraints become a greater concern for key customers such as automakers and battery manufacturers," Goldie-Scot and Frith wrote.

The adjustments may take the form of finding new supply or lessening demand. As lithium hydroxide, the preferred feedstock for making batteries, soared beyond $20,000 a metric ton in 2017 in Asia from $8,800 at the end of 2015, production capacity surged as companies opened or expanded mines.

Demand for cobalt is more elastic than for lithium because it's easier to replace. When cobalt jumped, manufacturers took steps to reduce their need for the metal, most of which is mined in the politically volatile Democratic Republic of the Congo, by shifting to chemistries that use less of it.

"By 2030 we expect nickel-manganese-cobalt 811 batteries to make up 40 percent of the market for passenger vehicles, with NMC 111 nonexistent," the analysts wrote. That would reduce the percentage of cobalt in a battery to 10 percent from more than 30 percent.

The strong demand outlook has prompted a number of investments affecting lithium and cobalt supplies this year:

• Toyota Tsusho and South Korea's Posco took stakes in Australian lithium miners.
• China's Contemporary Amperex Technology Co. revealed plans to increase its stake in Quebec-based North American Lithium.
• The CEO of French mining group Eramet said the company will expand operations in cobalt, lithium and nickel salts.

 

 

 

 

#NuLegacy #Gold @NuLegacyGold - $NUG $NULGF Rickards’ Gold Speculator Byron King's comments

"Strong upside coming out of the next phase of drilling" in next two months

Maintain buy on $NUG to C$0.50/share, $NULGF up to US$0.40 per share

Extract from: James Rickards' Gold Speculator Portfolio Update NuLegacy Gold Corp. (OTCBB: NULGF)

Maintain Buy up to: $0.40 Position sizing: 3%

February 27, 2018

NuLegacy shares traded slightly down in the past few weeks. Shares are down over the past year as well. We've had a long, downward drift in share price since last July. It's very frustrating, and the share price performance is such that, with almost any other company, we'd have sold out and walked away long ago.

Still, I'm hanging onto this one and awaiting additional news. That's because NuLegacy sits right in the heart of Carlin-style gold riches in central Nevada. The company's land position is not just good, but absolutely great, as you can see on this map:

Lundin Gold ($LUG.CN) raises US$400 MM in Private placement to @NewcrestMining, Orion, #Lundin family to fully fund #FrutaDelNorte #Ecuador To 2019 Production

Sales comment from Cormark

Lundin Gold (LUG CN) raises US$400 MM in equity with a strategic investor to fully fund the world-class FDN asset (Ecuador) into production.

Comfortably Funded To 2019 Production:

- Newcrest Mining (NCM-ASX) steps in as a 27.1% strategic shareholder and will subscribe for US$250 MM @ C$5.50/sh a 13% premium to the last close.

- Newcrest will be granted 2 board seats and anti-dilution rights.

- The Lundin Family will invest US$50 MM at the same price as Newcrest.

- Orion Mine Finance will invest US$100 MM at C$5.25/sh following through on its commitment attached to the earlier US$300 MM debt/stream financing with Orion/Blackstone (LINK).....Orion will be granted one board seat and anti-dilution rights.

- Based on the US$730 MM total capex and advance royalty payments (US$20 MM due in 2018), Lundin is easily funded to production with a >US$100 MM buffer and may have spare capacity to buy back the gold stream.

Newcrest Doubles Down On Ecuador:

- In addition to the large equity investment, Newcrest will also earn into a 50% interest in the exploration package surrounding FDN by spending US$20 MM over 5 years.

- Recall that this is Newcrest's 2nd largest investment vehicle in Ecuador and it already owns a 15% interest in SolGold(SOLG.T, Not Rated) following participation in US$63 MM worth of private placements.

- The strategic interest from Newcrest optically derisks Ecuador further and adds additional technical horsepower to assist in completing the FDN build.

Steps Closer To Trading At ~C$8.00 NAV:

- We like this deal for a number of reasons:

> The financing price easily beat our model estimates (we had modeled C$4.50/sh raise) resulting in substantially less dilution than expected

> The financing provides sufficient funds for working capital, contingency items and a very healthy buffer to cover any cost overruns or delays....we have seen how easily balance sheet concerns can dramatically erode equity value with even the slightest ramp-up headwinds (TXG, TMAC, PVG).

> The deal ensures a constant spend on the exploration package which currently carries little value ($0.16/sh) in our NAV but is under explored for FDN analogs.

> The partnership with a super major (>A$16 BB mtk cap) will increase M&A speculation and provides additional technical resources.

Bottom Line: Based on the new funding mix, our NAV is C$7.96/sh (at $1,250/oz Au) and we expect the stock to re-rate to 0.9-1x NAV once it reaches production given the rare scale (>300 koz/yr) and quality ($609/oz AISC) of this asset.

The Pangea Advisors Blog

@PangeaFeeds

#India & #Gold: 2018 Union Budget. World @GoldCouncil

India accounts for around a fifth of annual global gold demand, 

Arun Jaitley, India's Finance Minister, explicitly highlighted the government's desire to formulate a comprehensive policy to develop gold as an asset class, create gold exchanges, and revamp the Gold Monetisation Scheme. 

Better gold policies combined with rising incomes could bode well for India's gold industry.

http://www.gold.org/research/market-update/market-update-indias-budget-policy-and-progress 

#Copper: Difficult labor negotiations, #China, Mounting deficit; last year’s price catalysts are still present, keeping the market in play| 2018 PREVIEW

- In 2018, there are 40 various labor contracts up for negotiation - including at Escondida once again - representing 4 million tonnes of mining production and around 700,000 tonnes of refined production.

- "China's GDP may slip a bit - to 6.3% perhaps - but that rate of growth in such a large economy still means a lot more of everything (in tonnage terms) is consumed," 

- China's "One Belt, One Road" (OBOR) project - an estimated $5 trillion infrastructure project that connects 60-plus countries throughout the Eurasian region - is one of the final big pushes on the infrastructure front and is being hailed as a once-in-a-century opportunity for the entire commodities industry. 

http://www.metalbulletin.com/events/articles/3783068/2018-preview-mounting-deficit-labor-negotiations-to-spark-copper.html?utm_source=EMB0616_31st+Intl+Copper_YH&utm_medium=email+marketing&utm_content=Attend+an+event&utm_campaign=C7J0087E0024&utm_term=Read+the+article

2018 PREVIEW: Mounting deficit, labor negotiations to spark copper

Copper was one of the biggest winners of 2017; the catalysts that fueled that rally are reappearing this year.

A scorching Chinese property market, extended outages at some of the world's largest copper mines and upbeat global growth prospects all led to the unexpected rally to its highest price since August 2014 high in mid-October.

And those exact same bullish arguments remain for this year; whether prices will continue to soar could be determined in this quarter.

Last year, a strike at Escondida, the world's largest copper mine, lasted for 44 days. The growing disconnect between meager bonuses and recovering prices led to union frustrations, which eventually spread to neighboring country Peru. The strikes were initially not expected to last more than a couple days but the extended impasse wrong-footed the entire market.

Due to the lengthy contract dispute, Chilean output hit a six-year low, which forced the entire market into a minor deficit, according to the International Copper Study Group (ICSG).

It also set the stage for an extended deficit until the end of the decade, with the Portugal-based group forecasting a 150,000-tonne deficit in 2017 and one of  105,000 tonnes in 2018.

In 2018, there are 40 various labor contracts up for negotiation - including at Escondida once again - representing 4 million tonnes of mining production and around 700,000 tonnes of refined production.

And new Chilean employment laws favoring unions will only ratchet up the tension, according to Commerzbank.

"Heading into next year, a case can be made for a relatively higher trading range for copper compared to what we saw in 2017," INTL FCStone analyst Edward Meir also said.

"The first variable that should help the market next year is the fact that there will be a series of key labor negotiations that could potentially impact a substantial amount of metal," Meir added.

But nothing replaces what China does next year - the country accounts for roughly 50% of global consumption. Over the past few years, China has pumped billions in loose money into the financial system to avoid a downturn as the world's most populous country transitions towards a service-oriented economy and away from one predicated on infrastructure projects.

Even with GDP growth dipping below 7% per year, the Chinese economy is quickly approaching the United States as the world's largest economy.

China's "One Belt, One Road" (OBOR) project - an estimated $5 trillion infrastructure project that connects 60-plus countries throughout the Eurasian region - is one of the final big pushes on the infrastructure front and is being hailed as a once-in-a-century opportunity for the entire commodities industry.

"China's GDP may slip a bit - to 6.3% perhaps - but that rate of growth in such a large economy still means a lot more of everything (in tonnage terms) is consumed," INTL Metal Bulletin senior analyst William Adams said.

"It may cause some nervous markets and risk-off moments but the bull market in metals I think will power ahead in 2018," Adams added, also saying that he would not be surprised if prices hit $8,500 per tonne.

It seems like the market is in line with Adams' thinking, with Comex copper prices rallying for 13 consecutive days at the end of 2017 ahead of the Christmas holiday weekend.

Whether copper premiums recover globally is unknown but a key indicator will be the level of stocks in warehouses worldwide. In the United States, copper premiums are little changed and spot market activity has been muted.

Still, market participants are hopeful that, after a weak 2017, market volatility will return, with consumers growing more confident as the year progresses.

"It definitely will be a little more interesting on the spot side but not in the first quarter [of 2018]," a US-based supplier said.

Dalton Barker
dalton.barker@metalbulletin.com

Published 04 January 2018

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