VIDEO — Battery Metals Deals from Key Players Take Center Stage

- November 4th, 2019

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

October was a month full of announcements and deals in the battery metals space. 

Looking at cobalt, at the start of the month, Swiss investment company Pala Investments increased its acquisition offer for Cobalt 27 Capital (TSXV:KBLT,OTCQX:CBLLF) by C$30 million.

Some investors had voiced concerns about the initial C$501 million deal, including Anson Funds, which said at the time the offer was made that it “undervalued” the company.

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Cobalt 27 holds approximately 2,904 tonnes of physical cobalt at its warehouses in the US and Europe, as well as 11 royalty and streaming arrangements.

A new company named Nickel 28 Capital will be established and will hold Cobalt 27’s joint venture interest in the Ramu nickel-cobalt mine, as well as the company’s royalty portfolio on future projects.

Mining giant Glencore (LSE:GLEN,OTC Pink:GLCNF) also made news headlines in October when it signed a new cobalt supply deal with Chinese battery maker GEM (SZSE:002340).

The Swiss trader will provide GEM with at least 61,200 tonnes of cobalt from 2020 to 2024.

In October, the Investing News Network (INN) published a cobalt market update for the third quarter, featuring the top trends in the sector. Prices continued to surge during the three month period after Glencore announced the closure of its Mutanda mine at the end of the year.

In lithium, Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) announced it has found a potentially large source of lithium in California, saying it could become America’s largest supplier of lithium if it can successfully process the metal at a large scale.

The miner said it will invest US$10 million to build a pilot plant on site to extract the metal from the waste rock. The miner is also considering spending another US$50 million during the next phase for an industrial-scale plant with a capacity of up to 5,000 tonnes of lithium carbonate equivalent per year.

Earlier in the month, Mexico-focused Bacanora Lithium’s (LSE:BCN) shares jumped after it closed a strategic investment deal with Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460).

Ganfeng’s investment is set to boost Bacanora’s finance package for the development of the Sonora lithium clay project, which is forecast to produce an initial 17,500 tonnes per year of lithium carbonate.

The Chinese producer is also developing the Cauchari-Olaroz project in Argentina with Vancouver-based Lithium Americas (NYSE:LAC,TSX:LAC). The companies said in October that they have increased the project’s expected production capacity to 40,000 tonnes per year of battery-quality lithium for 40 years.

Capital costs for the lithium brine project have increased 33 percent, from US$425 million in a 2017 study to US$565 million, with output capacity jumping 60 percent from 25,000 to 40,000 tonnes of battery-quality lithium carbonate per year.

Lastly, looking to Australia, following a review of operations and due to weak market conditions, Australia’s Galaxy Resources (ASX:GXY,OTC Pink:GALXF) has decided to reduce its lithium output from Mount Cattlin in 2020. Mined material output is forecast to be 40 percent lower next year, but concentrate production is expected to be maintained at 75 percent of the current rate.

Also in October, INN published a lithium market update for the third quarter. You can check it out to learn more about the top stories and market dynamics in the sector during Q3.

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.

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