VIDEO - Battery Metals Update February 2019

Battery Metals

Here the Investing News Network looks at major events, announcements and developments in the battery metals space in February.

Here, the Investing News Network looks at the major events, announcements and developments in the battery metals space.

Looking at the major updates in the cobalt space, cobalt producer ERG will suspend production at its Boss mine in the Democratic Republic of Congo at the end of the month, which last year increased taxes to 10 percent on cobalt exports and it’s the world’s top producer. The company is considering future investments in new production methods.

In February, ERG also suspended cobalt production at its Chambishi refinery in Zambia after the African country approved a new 5 percent duty on cobalt concentrates imported into the country this year.

Analysts believe that even though the market might not feel the impact immediately, this is another challenge for cobalt output this year and it’s another case of legislation changing very quickly in Africa, a region which will be vital for cobalt supply in the future.

In fact, experts remain optimistic on cobalt demand. In February, Managing Director of Benchmark Mineral Intelligence Simon Moores told the US Senate that cobalt demand could increase four times by 2028 if full lithium-ion battery megafactory capacity is achieved.

Speaking of lithium-ion batteries, let’s have a look at what’s been going on with another key battery metal, lithium.

Looking at news from lithium-focused companies, Nemaska Lithium (TSX:NMX,OTCQX:NMKEF) made news headlines when it announced a financing shortfall of C$375 million to develop its mine in Canada due to installation and indirect costs.

A few days after, Nemaska also announced the end of a lithium supply deal with Livent (NYSE:LTHM).

INN spoke to a few analysts in the space, who overall pointed to the difficulties junior miners will have to bring lithium production online and how the “tsunami of supply” predicted by many is far from becoming a reality.

February was also quarterly and yearly results season, with top producers Livent and Albemarle (NYSE:ALB) posting results.

Shares of Livent, which spun off FMC (NYSE:FMC) last October, fell after it said customers in China are unwilling to make firm commitments for price and volume that are acceptable to the miner. But livent remains positive on the fundamental drivers of lithium demand.

Another top lithium producer, Albemarle also said it is optimistic and it is not expecting any significant macroeconomic challenges that could impact customer demand forecasts.

Meanwhile, in South America, heavy rains have pushed lithium producer Orocobre (ASX:ORE,TSX:ORL) to lower its output target for 2019 but have not impacted Lithium Americas’ (NYSE:LAC,TSX:LAC) plan to reach production by 2020.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Nemaska Lithium is a client of the Investing News Network. This article is not paid-for content.

The Conversation (0)