Engineering & Mining Journal

MAR 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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64 E&MJ • MARCH 2017 www.e-mj.com MARKETS Cobalt prices broke out in February climbing to $51,250/metric ton (mt) from $37,750/mt, a 35.8% increase, ac- cording the E&MJ Price Index. With the exception of lead, which was down 2.7% for the month, prices for other metals improved modestly with single-digit per- centage gains. At the end of December 2016, E&MJ reported cobalt prices of $32,900/mt or $14.95/lb. Since then, the metal has climbed to $23.70/lb, a 58.5% increase in value in two months. So, what's up with cobalt? The price increase is tied to investor hoarding in anticipation of increased de- mand related to electric vehicles, accord- ing to Reuters and the CRU Group, who said electric car and plug-in hybrid vehi- cle sales could hit 4.4 million by 2021 and more than 6 million by 2025, from 1.1 million last year. By 2020, 75% of lithium-ion batteries will contain cobalt, whose properties allow electric cars to extend their range between charges, ac- cording to eCobalt Solutions, which pro- duces battery-grade cobalt salts. In addition to batteries, cobalt is also used for super alloys in turbines for pow- er plants and jet engines. The metal is a byproduct of processing copper and nickel ores, which are found primarily in Sudbury, Canada; Norilsk, Russia; New Caledonia; and the central African copper belt. With copper and nickel prices trend- ing higher, production should follow, so cobalt supply should not be an issue. Duirng mid-February, Reuters report- ed that Swiss-based Pala Investments, a fund focused on the mining sector, and Shanghai Chaos Investment, one of China's largest commodities funds, pur- chased cobalt. According to Reuters, metal traders believe that investors are buying cobalt with the intention of sitting on it until prices rise to $25/lb or more. According to CRU, total global demand for cobalt last year was around 100,000 mt. "In terms of overall demand, EVs (electric vehicles) only consumed around 6.5% of refi ned cobalt in 2016. This will increase to 16.9% in 2021 helping lift demand to nearly 130,000 mt," CRU senior consultant Edward Spencer said. "We expect a defi cit in the region of 900 mt this year. However, a far larger defi cit could open quickly if mine and refi nery capacity growth fails to keep pace." Cobalt Prices Surge on Investor Buying By Steve Fiscor, Publisher & Editor-in-Chief Gold and silver prices provided by KITCO Bullion dealers (www.kitco.com). Platinum group metals prices provided by Johnson Matthey (www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (www.lme.co.uk). Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by www.xe.com. (March 1, 2017) Precious Metals ($/oz) Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Gold $1,249.00 Aluminum $1,934.00 Molybdenum $15,250 Euro (€) 1.052 Silver $18.39 Copper $6,040.00 Cobalt $51,250 U.K. (£) 1.228 Platinum $1,018.00 Lead $2,287.00 Canada ($) 0.747 Palladium $775.00 Nickel $11,000.00 Iron Ore ($/dmt) Australia ($) 0.758 Rhodium $920.00 Tin $19,375.00 Fe CFR China $87.62 South Africa (Rand) 0.076 Ruthenium $40.00 Zinc $2,872.00 China (¥) 0.145

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