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Why COBALT
Lithium-Ion Batteries

Cobalt is a key raw material in manufacturing cathodes for lithium-ion batteries.

Cobalt is the most critical mineral constraint in lithium-ion batteries and has been largely overlooked by investors
Problematic Supply Chain

About 60% of the world’s cobalt comes from the Democratic Republic of Congo which has experienced much instability and has been associated with practices such as forced labour, child labour, unhealthy working conditions and corruption.
Demand Growth

Demand expected to increase 10% this year to 110k tonnes. 

43% of incremental demand is for batteries.
Spot Price

Spot price increase of 150% since the beginning of 2016.

Macquarie Bank forecasts a deficit of 885 tonnes is expected in 2018, with deficits of 3,205 tonnes and 5,340 tonnes expected in 2019 and 2020, respectively
LITHIUM-ION BATTERIES

Last 5 years have seen a 20% per year cost reduction in battery pack systems

At the current rate of improvement, EV drivetrains are forecast to surpass the cost competitiveness of combustion engines within five to ten years
GROWING BATTERY CAPACITY & DEMAND
China is the world’s leader in cobalt consumption. New government subsidies are expected to further increase China’s demand for cobalt.
Nearly 75% of China’s consumption being used by the battery industry.  New 5-Year Plan to push for up to 15% of China’s power to come from non-fossil fuels.
China recently announced new plan to ban fossil fuel cars.
12x expected increase in the number of electric cars to be sold in China, from current 1% EV adoption rate in China today. 
ELECTRIC CAR REVOLUTION
Electric vehicle producers such as Tesla, Volkswagen and other manufacturers are searching beyond the DRC for cobalt supply to avoid supply disruptions and as consumers press companies for auditable and ethical material sourcing

Tesla’s Gigafactory requires more cobalt per year than entire US annual production

Tesla’s entry into home storage batteries and solar panels further increase the need for cobalt

It is estimated that  the rapid adoption of electric vehicles between now and 2035 will create an uplift for commodities demand eight times larger than that generated by China’s boom in the early 2000s.
PROBLEMATIC SUPPLY CHAIN
More than one-half of the world’s production is mined in the Democratic Republic of Congo (DRC)1

The DRC presents significant ethical, environmental, and political risks as the country has been implicated in child labour for cobalt

45% of DRC cobalt is produced by artisanal mining

95% of cobalt produced globally is a by-product of copper and nickel mining. Weak copper and nickel prices have caused a number of mines to curb production, significantly impacting cobalt production

 The US and China have identified cobalt as a strategic metal and are stockpiling cobalt