What we do


We are a consultancy business, specialising in engineering sectors such as mining, oil-and-gas and infrastructure.  

Our work for clients ranges from providing strategic advice on particular markets, to analysing market trends and assisting clients in pursuing market opportunities. 

In Australia, we follow projects and have detailed information available on operating mines and oil-and-gas sites.

We also work from time-to-time on developments in Asia. 

For further information on our services, please contact us at 0411 478307 or melbourne@resourcesmonitor.com.au. 



Source: Stephen Codrington



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Mining Notes

 


MOUNT THIRSTY: AMONG A NEW WAVE OF COBALT PROJECTS
20 September 2018

Cobalt is a key component of most lithium-ion batteries, which are used in electric vehicles, mobile phones and other portable devices. 

Cobalt, Congo and China

The Congo (Democratic Republic) in central Africa produces 60% of the world’s cobalt. Two companies dominate production there: Glencore (a major player in several mining sectors in Australia) and Chinese company CMOC (which owns the Northparkes copper mine in New South Wales). 

But a proportion comes from other sources (including small-scale informal mines) that are riddled with human-rights abuses, including child labour (see image, source: humanium.org). These abuses are becoming increasingly unacceptable in developed countries. 


Furthermore, in the view of Glencore’s chief executive, Ivan Glasenberg, Western car makers are “waking up too late” to what he sees as increasing Chinese control of global supplies. “If cobalt falls into the hands of the Chinese, you won’t see electric vehicles being produced in Europe”, he told a conference in Switzerland in March this year. 


Analysts estimate that China controls over 80% of the global supply chain for cobalt. 

Given these concerns, developed-country investors are increasingly looking at other sources of cobalt, with Australia and Canada particularly in the spotlight. 




Australia

One such potential source is the Mount Thirsty cobalt-nickel project, near Norseman in Western Australia. 

The project is unusual in that cobalt is the primary product – in over 95% of cases in the world, cobalt is a by-product of copper or nickel, not the primary product. 

A pre-feasibility study of Mount Thirsty is underway and will be followed by a feasibility study in 2019. All going well, construction will commence in 2020. 

Mining companies, Barra Resources and Conico, have equal ownership of the project, with Barra Resources driving the pre-feasibility study. The key consultant for the study is Wood (formerly Wood Group before acquiring AMEC Foster Wheeler in 2017). 

Mount Thirsty is one of at least half-a-dozen significant cobalt projects in Australia, not only in Western Australia, but also in Queensland and New South Wales. 

They all have good individual prospects. But how much difference will they make globally?

The outlook

The United States Geological Service estimates that world cobalt production in 2017 was 110,000 tonnes, of which the Congo produced 64,000 tonnes, followed a long way back by Russia (5,600 tonnes), Australia (5,000 tonnes) and Canada (4,200 tonnes). 

In the face of static production in the past five years and soaring demand, prices have soared, from around US$25,000 per tonne in mid-2016 to over US$90,000 per tonne in March this year. They have since slipped to around US$60,000 today. 

Unfortunately for the sake of a more competitive market, the God of Geology appears to have dictated that the Congo’s dominance is likely to continue. 

Australia, Canada and others may make a difference, but without cutting significantly into the Congo’s production dominance. Or China’s market dominance.  

All this is likely to lead to lower use of cobalt in lithium-ion batteries, with other materials (manganese) substituting for it, in whole or part. 

Barra Resources (of Mount Thirsty) remains confident that, in absolute terms, cobalt demand will continue to grow strongly. However, it sees the average cobalt content of electric vehicles falling by half over the next seven years (from around 10 to 5 kilograms). 

The Congo could counter this by reforming its mining sector and stepping up production. But serious signs of this are yet to appear. Or of Chinese assistance in this process.