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 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 $25/lb or more. According to CRU, total global demand for cobalt last year was around 100,000 mt. "In terms of overall demand, EVs (electric vehicles) only consumed around 6.5% of refi ned cobalt in 2016. This will increase to 16.9% in 2021 helping lift demand to nearly 130,000 mt," CRU senior consultant Edward Spencer said. "We expect a defi cit in the region of 900 mt this year. However, a far larger defi cit could open quickly if mine and refi nery capacity growth fails to keep pace." Cobalt Prices Surge on Investor Buying By Steve Fiscor, Publisher & Editor-in-Chief Gold and silver prices provided by KITCO Bullion dealers ( Platinum group metals prices provided by Johnson Matthey ( Non-ferrous base and minor metal prices provided by London Metal Exchange ( Iron ore prices provided by Platts Iron Ore Index. Currency exchange rates were provided by (March 1, 2017) Precious Metals ($/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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