At the start of 2017, China, the world's largest Gigafactory (battery manufacturer), announced that it would invest $360 billion in renewable energy by 2020 and scrap plans to build 85 coal-fired power plants.
An enormous amount of battery storage will be required to support this unprecedented transition toward electric cars and renewable energy.
Demand for cobalt powered batteries is soaring, causing governments around the world to scramble for secure supplies of the strategic metal.
Pacific Rim Cobalt Corp (CSE: BOLT, OTCQB: PCRCF) with offices in Jakarta, Shanghai and Vancouver (Canada) is highly active in the region, leveraging their flagship cobalt and nickel resource project for the benefit of early shareholders.
Pacific Rim Cobalt Corp (CSE: BOLT, OTCQB: PCRCF) has positioned itself in proximity to the worlds most active battery manufacturing region. The company has deep roots in the Pacific Rim with offices in Shanghai, Jakarta and Vancouver (Canada). Their shares are listed in the U.S., Canada and Germany - giving investors an opportunity to participate as management works toward building a successful battery metals company.
Management is savvy and experienced, and have seized the moment by building their company with an aim to supply the booming Chinese battery metals market, required to fuel electric vehicles and renewable energy.
The Global Electrification Movement Is Unavoidable
Electric Vehicles and Renewable Energy sector growth is expected to explode in the coming years, as pressure mounts to go green globally.
China, dubbed as the world’s largest Gigafactory, or battery manufacturer, is leading the way.
This emerging situation has created unprecedented investment opportunity for investors who have been paying attention.
Electric vehicles, solar plants and wind farms all have one thing in common – they require battery storage, and lots of it. Most of these batteries cannot function safely without an obscure, but globally critical metal called cobalt.
Read on to find out why this metal has become the focal point of multinational technology corporations and governments around the world, and how you could profit from its imminent rise.
Pacific Rim Cobalt Corp (CSE: BOLT, OTCQB: PCRCF)
Uncovering Indonesia’s Untapped Cobalt Potential.
The perfect storm is brewing for resurgence in the price of cobalt, and Pacific Rim Cobalt Corp is positioned to leverage this opportunity for shareholders.
- Pacific Rim Cobalt Corp (CSE: BOLT, OTCQB: PCRCF) led by an experienced management team is laying groundwork to become a "mine to market" supplier of cobalt to the world's largest buyer, China.
- The company is trading at historic low levels and presents an excellent entry point for investors seeking bottom fishing opportunities in an emerging sector.
- 100% owned and permitted large cobalt-nickel property in Papua Province, Indonesia, with a significant historical (non-compliant, see Appendix 3) resource and potential for expansion.
- Strategically located adjacent to tidewater with direct ocean access to China.
- Excellent infrastructure, Easy access to project (15km paved road to airport).
Indonesia Is Potentially The Largest Source Of Ethically Sourced Cobalt Outside of Africa.
Recently Sumitomo Metals & Mining, a massive Japan based mining company, announced it's plans to invest $1.8bn in Indonesia in order to meet demand for the burgeoning electric vehicle battery metal market.
Indonesia was the #1 nickel producer in the world in 2017. If you are not a mining and metals fanatic, you may not know that cobalt is a by-product of nickel mining. This was not so important years ago.
Before the rapid emergence of the electric vehicle revolution, 2013 - 2016, refined cobalt was selling for $10 to $15 per pound.
Midway through 2016, the metal started skyrocketing while multinational corporations, and countries, scrambled to lock up as much supply of this strategic metal as possible, due to rapidly growing demand and forecasted future supply shortages.
The price of cobalt rose over 300%, hitting nearly $45 in March 2018.
As trade war tensions between the U.S. and China started heating up, the price of cobalt, along with most other metals, cooled off.
However the fundamentals of the global pivot toward renewable energy, requiring batteries containing cobalt, have not changed. In fact it’s full steam ahead, and the stage is set for a resurgence in the price of cobalt.
“The majority of the cobalt is heading straight to China. Their global hold is huge.” - CRU
“The US and China have identified cobalt as a strategic metal and are stockpiling the metal” - USGS 2016
80% OF COBALT USED IN BATTERIES IS REFINED IN CHINA.
Demand for cobalt in batteries, driven by electric vehicle and renewable energy adoption, is expected to grow at 14.5%/year to 2027 (Roskill Information Services, June 2018)
This stat alone should give you pause - massive growth in battery metals demand is expected over the next several years as China's billion+ population modernizes and goes green.
Cobalt And Batteries
It can retain its strength at high temperatures (melting point of 1,495°C), and can be magnetized (one of only three naturally occurring magnetic metals, together with nickel and iron) - essential to consumer safety in electric vehicles and smart phones.
The unique properties of cobalt and cobalt products are responsible for its extensive applications in energy storage, industrial and many high tech applications.
The Cobalt Supply Crunch
The lithium-ion battery, which electric vehicles and renewable energy sectors rely on, cannot exist without cobalt.
The major concern with cobalt is that 65% of it is sourced from the Democratic Republic of Congo (DRC) (See Appendix 1) - notorious for child labor, atrocious work conditions and political corruption.
The fact that most of the world’s cobalt is sourced under these conditions has caused a global outcry to overhaul the supply chain. This has put tremendous pressure on companies requiring large amounts of cobalt to find new, safer jurisdictions for sourcing the metal.
The race to secure cobalt in safer jurisdictions has become so intense, multinational companies relying on batteries have stepped out to secure their own supply - Apple and VW, for instance.
Dyson, a U.K. company best known for its vacuum cleaners and other household appliances, revealed two years ago that it had initiated a 2 billion pound ($2.59 billion) project to design an electric vehicle. Dyson just announced it will not build its new electric cars in the United Kingdom, opting instead to manufacture in Singapore due to its proximity to China, the world's largest electric car market.
"We see cobalt-containing materials becoming increasingly common for electroplating, industrial catalysts and powerful magnets, as well as being a key component in lithium-ion batteries to power electronic devices and electric vehicles." - Matmatch.com
Global companies, such as LG Chem to Samsung, plan to open 36 electrical vehicle factories by 2023, according to analysts at Benchmark Mineral Intelligence. (Appendix 2)
Pacific Rim Cobalt Corp Wants To Unlock Indonesia's Vast Cobalt Potential
Indonesia, known as the #1 global producer of nickel, has not yet fully explored mineral processing options to unlock the vast cobalt potential held within the countries massive deposits.
Indonesia also carries less geo-political risk than central Africa, according to the Fraser Institute, presenting a better option for China’s cobalt requirements.
To this end, Pacific Rim Cobalt (CSE:BOLT, OTCQB:PCRCF) acquired the Cyclops property in the Indonesian province of Papua, as a potential future mining and mineral processing operation geared toward supplying Chinese demand for cobalt.
The Cyclops project is conveniently situated directly adjacent to tidewater, with deep port potential and direct shipping routes to all the major battery centers around the Pacific Rim.
An economic cobalt deposit at a location a short distance from most of the world’s operating battery production sites is indeed a coveted asset. Pacific Rim Cobalt's management had the foresight to lock this project down and raise the capital to rapidly advance it.
Chinese companies are actively and aggressively on the hunt for cobalt and nickel assets in Indonesia.
Earlier this month, Chinese battery firm GEM Co Ltd on Friday said it was teaming up with four companies to invest a total of $700 million in a project to produce battery-grade nickel chemicals in Indonesia.
To take advantage of the optimistic business climate between China and Indonesia, Pacific Rim Cobalt Corp. recently established a full time presence in Shanghai. With offices and operations also in Jakarta and Vancouver (Canada), the Company is has clearly positioned itself for success in the region.
Cyclops Project Potential
Prior to the explosion of smartphones, renewable energy and electric vehicles, extensive historical work was completed on the Company’s Cyclops project.
Early concession owners and developers had little interest in cobalt as a by-product of the large nickel potential found on the property, due to its low price at the time (1970’s).
With the resurgence in the price of cobalt and strong future demand outlook, Pacific Rim management jumped on the opportunity, acquired the project and raised over $8 million to develop it.
It’s not difficult to see how a historically defined nickel-cobalt deposit, with near term processing options, on the north shore of Indonesia would be meaningful to battery makers in Asia.
Pacific Rim Cobalt Corp Signs Their First Preliminary Supply Deal In China
Earlier this year Beijing Easpring, a leading Chinese supplier of lithium cathode material, unveiled expansion plans, saying demand for electric vehicles had outstripped its existing lithium-ion cathode material production capacity.
In July Pacific Rim Cobalt Corp reached a preliminary offtake agreement with Beijing Easpring, expected to grant Easpring the right to purchase both nickel sulphate and cobalt sulphate from Pacific Rim Cobalt's Cyclops project for the initial 5 years of production.
This significant news is the Company’s first official foray into securing a supply deal in China, and one of many efforts from large Chinese tech companies looking to Indonesia to secure crucial nickel and cobalt supply.
The agreement has officially placed Pacific Rim Cobalt Corp on the Chinese map, as a potential contender to supply the country’s insatiable requirements for these metals.
“It appears that the raw material supply chain for the battery sector is becoming increasingly recognized as an opportunity with significant growth potential,” said Ranjeet Sundher, Pacific Rim Cobalt’s (CSE:BOLT, OTCQB:PCRCF) President & CEO.
Pacific Rim Cobalt Corp wants to join the ranks of multinational mining companies who are supplying China with a conflict-free flow of cobalt and nickel.
With an extensive development program ongoing on the Cyclops project, the Company is currently exploring the mineral processing options available to it.
Infrastructure to and around the project is excellent. It’s a 45 minute drive on sealed roads from the airport and in close proximity to a city (Jayapura, pop. 350,000).
Cyclops is adjacent to deep tidewater, opening up the potential for easy port access and direct shipping routes to Asia.
In other words, management ensured all the critical boxes have been checked when reviewing and securing this impressive project.
Location, infrastructure, mineral grade and market dynamics all point to a strong future for this emerging investment opportunity.
Pacific Rim Cobalt Corp (CSE: BOLT, OTCQB: PCRCF) is entering Chapter Two of it’s evolution, and the entry level for new investors couldn’t be better.
A greener future is unavoidable, and the battery storage needs around the world will ensure demand for cobalt remain strong, giving investors an opportunity to participate, and potentially profit from, this once in a generation paradigm shift.
Please visit Pacific Rim Cobalt Corp's website for more information on this emerging investment opportunity.
Appendix 1 - Cobalt and the Democratic Republic of Congo
Concerns over the sourcing of cobalt from makeshift mines in the Democratic Republic of Congo (DRC) are threatening the entire supply chain. This is a major, ongoing issue as the DRC is responsible for 65% of global cobalt supply. Manufacturers facing pressure to ethically source their materials are now seeking new supply chains to prove their cobalt was acquired without the use of child labor.
Apple Inc.(AAPL) recently took direct control of its cobalt procurement, sidestepping middle-men suppliers, to ensure that no child labor was involved in making its iPhones. Volkswagen has taken a similar move, looking for a long-term supply deal with a reputable cobalt supplier.
The London Metals Exchange (LME) recently increased its scrutiny of companies that source cobalt from the DRC in the light of fresh concerns about the sourcing of cobalt. The situation in the central African country appears to be getting worse, not better, when it comes to calming buyers’ fears of substandard working conditions and overall supply disruption fears due to political corruption and human rights abuse issues.
Switzerland’s Glencore, the world’s largest cobalt producer, is currently facing a swarm of problems in the DRC – from shady dealings with an Israeli arms dealer, to an ongoing massive corruption investigation. Glencore’s troubles in the DRC are an absolute nightmare for makers of electronic batteries from Panasonic to Tesla, with the prospect of a shortage looming overhead. Panasonic, the exclusive supplier of electronic batteries to Tesla, will more than triple cobalt consumption in five years, according to Reuters.
The DRC situation underscores the need for global mining industry to develop new sources of cobalt from geographies that are conflict-free. Securing a new supply from countries like Indonesia could help the likes of Apple and Tesla by easing investors’ fears over environmental concerns. The country has a strong mining regulatory framework and responsible environmental laws.
Like any commodity market, the winners are likely to be companies that can own a large-scale resource that can be developed at a low cost, and in a jurisdiction with low political risk.
Appendix 2 - Smartphones Aside, Demand for Cobalt is Projected to Triple
The world currently ships 1.4 billion smartphones annually and that market is expected to grow 3% in 2019, according to consultants IDC. However, the bulk of future demand lies in batteries used in electric vehicles and renewable power (solar and wind). More than a dozen countries, including China, legislated for entire EV car adoption in a 2024-2025 timeframe last year, according to Ken Hoffman, a basic materials expert at McKinsey & Co.
The average EV contains 8 kilograms of cobalt, according to Glencore. If EVs represent 30% of the global car fleet in 2030, that will require 314,000 tons a year of new supply of cobalt, more than triple what it is now, Glencore said.
The likes of Pacific Rim Cobalt (OTCQB:PCRCF) (CSE:BOLT) hope to ultimately offer a diverse and safer source of supply of cobalt than the DRC, especially as there is a drive from major global corporations to ensure that their supply chains are free of labor abuse. The Cyclops project is located close to the port of Jayapura on the island province of Papua and provides good future port access to Chinese markets.
Appendix 3 - Historical Estimate
Pacific Rim Cobalt considers the cobalt and nickel tonnage and grade estimates contained herein to be historical estimates. The historical estimates are contained in the Summary Geologic Investigations, PT. Pacific Nikkel Indonesia 1969 – 1979 (Reynolds 1979). These historical estimates do not use categories that conform to current CIM Definition Standards on Mineral Resources and Mineral Reserves as outlined in National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”) and have not been redefined to conform to current CIM Definition Standards. These estimates were prepared in the 1980s prior to the adoption and implementation of NI 43-101. A qualified person has not done sufficient work to classify the historical estimates as current mineral resources and Pacific Rim Cobalt is not treating the historical estimates as current mineral resources. More work, including but not limited to, drilling, will be required to conform the estimates to current CIM Definition Standards. Investors are cautioned that the historical estimates do not mean or imply that economic deposits exist on the Company’s project. Efforts to obtain any additional information regarding relevant historical work is ongoing, although there are no assurances that this original data will be found. Pacific Rim Cobalt believes that the historical estimates are relevant to continuing exploration on the project. For more information please refer to our technical report, filed on SEDAR on December 8, 2017 and available under the Company’s profile at www.sedar.com.
Other Dominant Industry Players
CleanTeq (OTCQX:CTEQF) (TSX:CLQ) (ASX:CLQ) is developing the Clean TeQ Sunrise nickel-cobalt-scandium laterite project in New South Wales, Australia. The company also owns a proprietary hydrometallurgical process to treat ore at the facility that will be dedicated to the supply of battery metals. CleanTeq also owns a wastewater treatment business that recycles waters in power, mining and industrial applications. The company has signed an offtake agreement with Beijing Easpring last year, a five-year agreement for 20% of the company’s cobalt and nickel sulphate production.
Glencore plc (London: GLEB) engages in the production, refinement, processing, storage, transport and marketing of metals and minerals, energy products, and agricultural products worldwide. It operates in three segments: Metals and Minerals, Energy Products, and Agricultural Products. The Metals and Minerals segment is involved in smelting, refining, mining, processing, and storing zinc, copper, lead, alumina, aluminum, ferroalloys, nickel, cobalt, and iron ore. The Energy Products segment activities include coal mining and oil production operations covering crude oil, oil products, steam coal, and metallurgical coal; and investments in ports, vessels, and storage facilities. The Agricultural Products segment engages in the storage, handling, processing, and port facilities of wheat, corn, canola, barley, rice, oil seeds, meals, edible oils, biofuels, cotton, and sugar. Glencore plc markets and delivers physical commodities sourced from third party producers and its production to industrial consumers in the automotive, steel, power generation, oil, and food processing industries. The company was formerly known as Glencore Xstrata plc and changed its name to Glencore plc in May 2014. Glencore plc was founded in 1974 and is headquartered in Baar, Switzerland.
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