Canadian Energy Materials CEO Michael Schuss discusses the importance of cobalt in lithium-ion batteries and the types of projects being developed to meet this demand.
In the interview below, Schuss provides an overview of the cobalt mining process, the types of mineralization it is found in and why it’s an integral part of the lithium-ion battery.
Below is a transcript of our interview with Canadian Energy Materials CEO Michael Schuss. It has been edited for clarity and brevity.
Investing News Network: How do you go about selecting a project?
Canadian Energy Materials CEO Michael Schuss: You must have the right commodities. Let’s face it, if the gold market is hot then everybody’s going to want a gold project. There’s a simplicity of what to look at. Right now battery metals, such as lithium and cobalt, are hot and you have to focus on that.
The biggest thing you look for, however, is the quality of the project. Sometimes in a bad market, I’ll see an exceptional copper project when no one wants one. I’ll still acquire that project, but I’ll wait until the cycle changes before developing and promoting it.
INN: When you’re looking at a project, do you often find a good project that has potential four, five, six years down the road?
MS: Many successful junior mining companies have an inventory of off-cycle projects that they don’t talk about and this ensures that they’re ready when that cycle does change. You don’t want to be the ambulance chaser promoter who jumps in and gets some sort of an excuse of a lithium project.
INN: By the time that everybody’s aware of it, it’s too late to enter into that market anyway, right?
MS: Absolutely. When looking at the lithium space, there’s no shortage of spodumene, or hard rock lithium, and you’re left with factoring in the price. If the price of lithium is high, the spodumene’s profitable. Lithium in itself isn’t rare.
INN: Why is cobalt different?
MS: Cobalt is produced as a byproduct. This is the third time in my life that the world’s going to run out of cobalt. Us old timers take everything with a bit of a grain of salt on that, but we do need cobalt to power our batteries and electric vehicles (EVs).
Don’t believe people who tell you that you don’t need cobalt in the batteries because they will catch on fire if they don’t. If you want to know the facts, go to Panasonic’s (TSE:6752) website and look at their shipping instructions. Batteries, even lithium batteries, are not 100-percent safe and trying to use less cobalt might put you out of business as a battery maker.
INN: What do you say to people who say we don’t need cobalt anymore?
MS: Battery technology has been evolving over my life time. Ten years ago, we didn’t have lithium-ion batteries and everyone was still using nickel-cadmium or lanthanum-based batteries. There’s always the possibility that a different technology could take over, but I don’t see that happening anytime soon due to the rise of EVs. If you believe 50 percent of what everyone is predicting then there’s still going to be a shortage of cobalt.
INN: There don’t seem to be any pure cobalt plays. Why is that?
MS: Cobalt is a scavenger mineral. When you find a mineralized system that contains cobalt, you’re also getting arsenic, uranium and cadmium. You want to find cobalt in a copper or nickel mineralization that will produce it as a byproduct. To be able to find a project with grades high enough to support a cobalt-only mine doesn’t exist in nature.
INN: Why is the DRC so important as far as cobalt is concerned? Is it due to the rich copper deposits found there?
MS: The DRC has a lot of clastic sediments that host a lot of copper in a lead–zinc formation. The country contains numerous big stable basins containing mineralized brines and fluids that the metals reside in. These brines are found throughout the African copper belt and often contain lead and zinc as well as cobalt.
The other things to factor in is that the copper in the cooper belt is extremely clean, which also means that the cobalt minerals are very clean. There’s no arsenic or iron and the cobalt can be easily processed in a copper or nickel smelter.
INN: Does that bring production costs down?
MS: Producing nickel or cobalt is a long, drawn out process and is done in the tank slimes from big copper or nickel processing plants. This lets certain companies control a cobalt refinery or access it at a reasonable price, but you still won’t be producing cobalt.
INN: Are there alternatives to cobalt?
MS: In metallurgy, not really. However, people have been trying to engineer cobalt out of batteries for years because it’s expensive and hard to get. Do I think Panasonic would like to get rid of cobalt? Yes. They want to save money, so they can make money. I just don’t think we’ll see a lithium-ion battery without cobalt within the next 10 years.
I also don’t think the price of cobalt or lithium is factored into the price of the battery. I think the chemistry is more important because you need to use cobalt to prevent the battery from catching on fire.
This video interview is sponsored by Canadian Energy Materials (TSXV:CHEM). This video interview provides information which was sourced by the Investing News Network (INN) and approved by Canadian Energy Materials, in order to help investors learn more about the company. Canadian Energy Materials is a client of INN. The company’s campaign fees pay for INN to create and update this video interview.
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