Talks are now underway between RNC Minerals and a large number of financiers, mine operators, and commodity traders to begin developing the world’s largest nickel and cobalt project, company reps have revealed. The project will be in Canada.
The company is reportedly aiming to secure $1 billion or so for use during development — with the aim being to get set up to take advantage of the expected boom in the electric vehicle battery market over the coming decades (nickel and cobalt are important materials in the current iterations of such batteries).
As interest in electric vehicles grows, key resources have been rising steadily in price — hence the ability of mining firms to accelerate plans that had earlier been on ice, as explained by execs from RNC Minerals (formerly known as Royal Nickel).
To provide some more information here, the facility in question is slated for development at the “Dumont” site in the province of Quebec, where around 3.15 million tonnes of nickel sulfide and 126,000 tonnes of cobalt reportedly await extraction. Those reserves represent the largest undeveloped reserve of both metals in the world, according to RNC Minerals (based on data sourced from S&P Global Market Intelligence).
Reuters provides more: “RNC, which changed its name from Royal Nickel in 2016, is in talks with large Japanese trading houses, companies that offer ‘streaming’ deals and miners interested in off-take arrangements to feed their smelters, said Chief Executive Mark Selby in an interview.
“Streaming deals offer miners upfront cash in exchange for future production at a discounted, fixed price. ‘We have a clear path to secure financial backing,’ said Selby. … In the past six months, nickel prices have climbed 38% and cobalt 27%. RNC is not yet in direct talks with battery makers or car companies, but is open to those discussions, Selby said.
“The company is also seeking debt financing to fund half the development cost, he said, and expects to complete financing deals late this year and start the two-year construction project in 2019. RNC owns 50% of Dumont with private equity firm Waterton Global Resource Management holding the remainder.”
As it stands, around half of the cobalt that hits the global market originates from the Democratic Republic of Congo — where the environmental and human toll of mining is often quite high (environmental damage and widespread slavery of various kinds).
The leading firm in the cobalt sector is currently Glencore — which exports over 28,000 tonnes a year (as of 2016). What that means, when taken together, is that RNC Minerals likely has a very good opportunity to grab significant market share in the rapidly growing sector over the coming years — hence the figures being discussed for the development of the Dumont site and the apparent interest from financiers, traders, and suppliers.
To continue with the Reuters coverage: “Analysts at Macquarie Research expect cobalt deficits of 885 tonnes this year, 3,205 in 2019 and 5,340 in 2020. BMO forecasts a 36,000-tonne nickel deficit in 2018 and sees demand for nickel used in electric car batteries to grow by 215,000 tonnes by 2025, about 10% of the current market size.”
As one can see when taking a look at those figures, there’s likely to be quite a rush to exploit and extract the mineral resources associated with plug-in electric vehicles over the coming years. Expect to hear more and more news similar to the RNC Minerals announcement discussed above as the years grind on by.
It’s also fairly likely that you’ll hear more and more about auto manufacturers deepening their involvement in battery production and sourcing — an advantage in the sector currently held by Tesla, and practically no one else. That’s one of the main reasons that I’m not anywhere near as much of a skeptic about Tesla as many people now seem to be — Tesla is gearing up to effectively be able to meet its own battery demand, and to do so at a very low price point. That gives the company an enormous advantage over the other auto manufacturers out there with regard to plug-in electric vehicles. While that gap can certainly be bridged by the larger auto firms (one would think), it will likely take quite a lot of time to do so.
Oh … and while all of this is going on, you’ll also be hearing more and more about flooding cities, dying oceans, burning states, mass migrations, the return of mass outbreaks of diphtheria, cholera, etc., and, of course… resource wars, dehumanization, mass projection, and scapegoating.
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