Chris Berry Talks Cobalt And Its Role in the Battery Industry

- June 20th, 2016

INN and Berry discussed cobalt, what China Molybdenum’s (HKG:3993) acquisition of Freeport McMoran’s (NYSE:FCX) interest in the Tenke mine will mean for the industry going forward, if cobalt will be bigger than lithium in the battery business, how the cobalt industry has been surprising so far this year, and what stocks to watch for.

Last week, Zimtu Capital hosted the first ever Vancouver Commodities Forum at the Hyatt Regency Hotel. 
The Investing News Network (INN) was on the floor and interviewed some of its speakers, one of which was Chris Berry of House Mountain Partners and the Disruptive Discoveries Journal. Berry is an independent analyist with a focus on how disruptive trends in energy, strategic metals and technology can create opportunities. He frequently writes on how this theme affects the markets for lithium, cobalt, graphite, vanadium and rare earths.
Here, INN and Berry discussed the following:

  • What China Molybdenum’s (HKG:3993) acquisition of Freeport McMoran‘s (NYSE:FCX) interest in the Tenke mine will mean for the industry going forward
  • Whether cobalt will be bigger than lithium in the battery business
  • How the cobalt industry has been surprising so far this year; and
  • What stocks to watch for

Watch the interview to hear what he had to say:


Interview transcript:
INN: China Moly’s acquisition of Freeport McMoran’s interest in the DRC’s Tenke mine will make it the largest producer of cobalt. What does this mean for the cobalt industry in coming years?
CB: Well it’s very significant and I think when you look at a lot of these battery metals or energy metals, as I call them, one of the one’s that China really doesn’t have a strangle hold on yet in terms of the mining is cobalt.  A lot of the cobalt that’s mined in the DRC and other parts of the world ends up in China to be refined but I think that China Moly’s move to tie up Freeport’s African assets and also Freeport’s cobalt refining opportunity in Finland is extraordinarily significant.  Because what it means is the Chinese are playing the long game to tie up that angle of the battery supply chain.
INN: You once said that cobalt could be a bigger story than lithium going forward in the battery business. Do you still believe that? 
CB: I do. I do because—look, there really is no easy way to do a peer play around cobalt.  Yes, there are a couple of juniors out there, and that has pros and cons just like everything else, but really, cobalt is a byproduct of nickel and copper mining, and so if you’re trying to get a sense for the future direction of cobalt from a supply perspective, you really need to think about copper, copper price, nickel and nickel price.  And a lot of nickel, for example, right now is under water on a cash basis. And so until you see those markets start to ‘find the new normal’, to steal a phrase that’s been thrown around a lot, you know, I think cobalt is going to remain a very, very, interesting and challenging place to focus on.
INN: What has surprised you most about the cobalt industry this year?
CB: That’s a good question. I think one of the things that’s surprised me is how most people haven’t woken up to the opportunity.  Again, we can get into a lot of the details about battery and battery metals and how important lithium is, or cobalt is or graphite is, but I think cobalt is really sort of an undiscovered opportunity right now and hopefully that will change soon.
INN: Which junior cobalt companies have interested you so far this year?
CB: Well, it’s a short list, obviously. Formation Metals (TSX:FCO) is out there and there are a couple of others as well, obviously, Global Cobalt (TSXV:GCO) has been in the space.  Global Energy Metals is a private play that I’m actually an advisor to, in the interest of full disclosure.  And, you know, what they’re looking at doing is actually being sort of a battery metals bank, which is another interesting take and another interesting idea going forward.  And that, honestly, is really it at this point in time. There are some other ones out there but those are the ones I think people are the most focused on right now.
Don’t forget to follow us @INN_Resource for real-time news updates!
 

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network.
Formation Metals is a client of the Investing News Network. This article is not paid for content.
 

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