Deep observation of the lithium battery industry: exploring the ambitions and anxieties of cobalt miners

Aug 15, 2019   Pageview:7

In 2017, the hottest new energy car industry will be lithium batteries, while the most dazzling non-cobalt in the lithium battery industry will be.


In the power lithium battery field, compared to other materials, because of its strong comprehensive advantages in energy density, cost, safety, and stability, ternary materials are being adopted by more and more battery manufacturers; In ternary materials such as lithium nickel-cobalt manganese acid and lithium nickel-cobalt aluminate, the amount of cobalt used is usually one-third, so the demand for cobalt materials has suddenly increased.


Since the financial crisis, the prices of non-ferrous metals such as copper and nickel have been falling. As a result, many mining giants around the world have closed mines and reduced output. Cobalt production as copper, nickel and other associated minerals has also been affected. Although the prices of non-ferrous metals such as copper have recovered since 2016, mine production has not increased significantly, which has also made cobalt supply growth unable to keep up with the growth of demand and has been in a tight balance or even in short supply. Cobalt prices have also been soaring, even breaking through the high price of 600,000 yuan per ton at the beginning of this year, more than triple the low point.


Affected by this, the performance of Cobalt-related companies has also risen, they have doubled or even multiplied, and net profits are also the same; It is not uncommon for stocks to double or even double, with share prices soaring. Cobalt has thus become a hot spot, and many companies compete for layout.


The calm and calm of the cobalt giant


According to statistics from the United States Geological Survey(USGS), the global reserves of cobalt resources are nearly 7 million tons, and their geographical distribution is very uneven. They are mainly concentrated in the Democratic Republic of the Congo, Australia, Cuba, the Philippines, Canada, Russia, Zambia, New Caledonia and other places. About 78 % of the world's total cobalt reserves; Among them, Congo's cobalt reserves are 3.4 million tons, accounting for 48 % of global cobalt reserves, ranking first in the world; China is a country that lacks cobalt mineral resources, with only 80,000 tons, accounting for 1.1 %.


Therefore, Luoyang Molybdenum industry is undoubtedly the leader in this battle for cobalt resources who can obtain more cobalt resources in the Democratic Republic of the Congo.


Absolute giant: Luoyang Moly Industry


When it comes to cobalt, two giants have to be mentioned: one is the international giant Glencore, and the other is the domestic giant Luoyang Molybdenum industry. As one of the world's second largest cobalt giants after Glencore, Luoyang Moly took less than two years, all due to its two acquisitions: In May 2016, Luoyang Moly purchased PDK for US$ 2.65 billion. Freeport-McMoRanDRColdingsLtd.. (FMDRC) 100 % equity, thus obtaining a 70 % stake in TFHoldingsLimited(TFHL). This acquisition allows Luoyang Moly Industry to indirectly hold TenkeFungugunumminingS.A. located in the territory of the Democratic Republic of the Congo. (TFM) 56 % equity; In April 2017, Luoyang Moly Industry completed the acquisition of 30 % equity of TFHL held by LundinMiningCorporation through BHR, which indirectly obtained a 24 % equity interest in TFM24 %. At this point, Luoyang Moly Industry indirectly held 80 % of TFM80 % of the equity.


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