WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Alt Text

The Single Biggest Bullish Catalyst For Oil

The backwardation situation in Brent…

Alt Text

Oil Prices Climb As Oil Rig Count Drops

The number of active oil…

Alt Text

Oil Prices Boosted By String Of Bullish News

Oil prices rose on Friday…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Is The Electric Car Boom Running Out Of Fuel?

Tesla

A perfect storm is brewing in the 21st-Century energy market, and it has nothing to do with OPEC.

It’s about batteries that charge everything from mainstream electric cars to massive power walls and mountains of consumer electronics.

More specifically, it’s about what goes into those batteries—and it’s not just lithium.

The other element that makes up 35 percent of the lithium-ion batteries mass produced at Tesla’s (NASDAQ: TSLA) Nevada gigafactory—and at a dozen of other behemoths slated to come on line—is cobalt.

And it’s already in dramatically short supply.

A part of the answer to the cobalt deficit is 100 percent American, and this little-known miner is sitting on a prime Idaho cobalt project that is one of only two that looks likely to come online in the U.S.— and it’s right in Tesla’s backyard.

It was with insight into the coming cobalt squeeze that US Cobalt (TSX:USCO; OTC:SCTFF) acquired Iron Creek in September right in the heart of the Idaho Cobalt Belt. This is one of the most prolific cobalt mineralization trends in the U.S.—and it’s at the heart of a new, ethical supply chain.

High-Energy Batteries Need More Cobalt Than Lithium

If you’ve been focusing your investment on lithium, you’ve been missing the even bigger story.

(Click to enlarge)

EV batteries need about 200 grams of refined cobalt per kilowatt of battery capacity. Power walls need more than twice that. Between March 2016 and April 2017, the cost of the cobalt in that mix nearly tripled.

But it isn’t just the price that’s got manufacturers worried. It’s the shortage of availability.

Keeping gigafactories stocked with enough cobalt to run at capacity is the challenge of the decade.

Tesla—now with a $50-billion market cap—launched a $5-billion battery gigafactory in Nevada in January. By the end of 2017, it will have doubled the entire global battery production capacity. By next year, it will be producing more batteries than the rest of the world combined.

It is estimated that Tesla’s gigafactory alone will need anywhere between 7,000 and 17,500 tonnes of refined cobalt every year.

Tesla used to buy its finished battery cells from Panasonic, which in turn got its processed cathode powders from a Japanese company, Sumitomo was processing its own cobalt in the Philippines. However, that facility is already running at capacity and couldn’t even begin to handle Tesla’s gigafactory demand. In other words, Tesla’s supply chain is no longer secure.

And that’s just Tesla.

The EV market is fifteen times larger than it was five years ago. The market has experienced a compound annual growth rate of over 72 percent from 2011-2016. This year, analysts expect it to gain another 25-26 percent. Last year, global EV production grew 41 percent, and sales are up more than 60 percent year on year.

(Click to enlarge)

In addition, U.S. Cobalt’s (TSX:USCO; OTC:SCTFF) Iron Creek project isn’t a new exploration property. It has already seen major historic exploratory work, including 30,000 feet of diamond drilling.

Iron Creek has historic (non 43-101 compliant) indications of 1.3 million tons grading 0.59 percent of cobalt with encouraging indications of up to 10 million tons.

The ‘closeology’ is also brilliant. It’s right next to the only advanced cobalt project in the U.S., which has a resource of 3 million-plus tonnes of cobalt.

As the battery market hits fever pitch and the supply-chain bottlenecks become unbearable, homegrown exploration is the key—first-movers and first investors will be the biggest beneficiaries.

A Very Precarious Supply Chain

Supply is already in deficit— and we’re also looking at an anticipated 500 percent increase in demand. Analysts at Macquarie Research project deficits of 885 tonnes of this resource next year, 3,205 in 2019 and 5,340 in 2020.

Not only is demand set to wildly outstrip supply very soon, but current supply (50 percent) comes primarily from the Democratic Republic of Congo (DRC). Buyers are coming under increasing pressure to look elsewhere for cobalt. The DRC has a horrendous record when it comes to labor practices and human rights.

Ask Apple Inc. (NASDAQ:AAPL). The tech giant recently announced it would stop buying unethical DRC cobalt for its iPhones—and as such, it has been forced to look for new suppliers.

The perfect storm continues: Some 95 percent of the world’s cobalt is produced as a byproduct of copper and nickel mining. This means that cobalt supply is dependent on copper and nickel mining, and if those commodities are uneconomic to mine, there are no cobalt by-product results.

(Click to enlarge)

Not only is US Cobalt (TSX:USCO; OTC:SCTFF) one of the first movers on the All-American ethical cobalt scene, but it’s also financed to advance its Idaho Cobalt Belt project, and hopes to prove up 10 million tonnes of cobalt resource.

The Dream Team Behind Pure American Cobalt

The CEO of US Cobalt, Wayne Tisdale, is a legend in spotting emerging trends with impeccable timing and has created billions in shareholder value.

He’s already done it with uranium, gold and oil and gas, and his most recent homerun was in lithium, with Pure Energy. When it launched in 2012, lithium was selling for about $5,000 per tonne. Within 18 months, it had increased 450 percent.

His next bet is on cobalt.

Tisdale and his team at Intrepid Financial have, in recent years, created $2.7 billion in value by building and financing 5 companies in completely different industries:

• Rainy River (gold) was worth $1.2 billion at its peak
• Xemplar (uranium) hit $1 billion at its peak
• Ryland Oil (oil and gas) sold for $114 million
• Webtech Wireless (tech) was worth $300 million at its peak
• Pure Energy (lithium) is worth $65 million (and counting)

The bottom line? There is no other commodity on the market right now that we need more.

Just watch what the hedge funds are doing with cobalt because it’s unprecedented.

The run on physical cobalt started in February in the least expected corner: Major hedge funds started buying up physical cobalt and hoarding it in order to gain exposure, resulting in a major supply shortage for the blue metal.

Swiss-based Pala Investments and China’s Shanghai Chaos have already hoarded 17 percent of last year’s global production. At today’s prices that’s worth around $280 million. At tomorrow’s prices, it will be worth a lot more.

When hedge funds start stockpiling physical cobalt, it sends its traditional buyers into a panic to secure new shipments.

Since November, cobalt prices have rallied more than 100 percent, and this is only the beginning.

As the cobalt supply problem grows, and EV giants and gigafactories continue to increase demand, a home-grown solution is at hand.

As a first principle of investing, where there is a supply problem, there is a massive opportunity for early investors.

US Cobalt is in an ideal position to answer the call and create shareholder value. US Cobalt (TSX:STM.V; OTC:SCTFF) enters the picture with a pure play cobalt project that could help put the U.S. on the cobalt map in a meaningful way.

Honorable Mention Stocks in the Metals, EV and Batteries Space:

Albemarle Corporation (NYSE:ALB): This is the largest producer of lithium in the world, and it owns the only working lithium/brine mine in the U.S., in Silver Peak, Nevada. It’s stocks have be on an amazing upward climb.

(Click to enlarge)

Vivint Solar (NYSE:VSLR): Ok, so solar.. Why in this list, you ask? Because Vivint is riding high after announced a collaboration deal with Daimler to bring the Mercedes-Benz customizable home energy storage system to the U.S. solar market.

By. Charles Kennedy

**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**

DISCLAIMERS

PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, Advanced Media Solutions Ltd, it’s owners, managers, employees, and assigns (collectively “The Company”) has been paid by a third party to disseminate this communication. This compensation is a major conflict with our ability to be unbiased, more specifically:

This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. If we own any shares we will list the information relevant to the stock and number of shares here. We have been compensated by US Cobalt Inc. to conduct investor relations advertising and marketing for [TSX:USCO.V; OTC:SCTFF]. Oilprice.com receives financial compensation to promote public companies. This compensation is a major conflict of interest in our ability to be unbiased. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the company. The third party, profiled company, or their affiliates may liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Any non- compensated alerts are purely for the purpose of expanding our database for the benefit of our future financially compensated investor relations efforts. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor relations marketing, which often end as soon as the investor relations marketing ceases. The investor relations marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur. Our emails may contain forward looking statements, which are not guaranteed to materialize due to a variety of factors.

We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company’s website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct. Furthermore, The Company often employs independent contractor writers who may make errors when researching information and preparing these communications regarding profiled companies. Independent writers’ works are double-checked and verified before publication, but it is certainly possible for errors or omissions to take place during editing of independent contractor writer’s communications regarding the profiled company(s). You should assume all information in all of our communications is incorrect until you personally verify the information, and again are encouraged to never invest based on the information contained in our written communications.

DISCLOSURE. The Company does not make any guarantee or warranty about what is advertised above. The Company is not affiliated with, any specific security. While the Company will not engage in front-running or trading against its own recommendations, The Company and its managers and employees reserve the right to hold possession in certain securities featured in its communications. Such positions will be disclosed AND will not purchase or sell the security for at least two (2) market days after publication.

NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.

FORWARD-LOOKING STATEMENT. As defined in the United States Securities Act of 1933 Section 27(a), as amended in the Securities Exchange Act of 1934 Section 21(e), statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR- OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this message and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using the methodology or system will generate profits or ensure freedom from losses. The testimonials and examples used herein are exceptional results, which do not apply to the average member, and are not intended to represent or guarantee that anyone will achieve the same or similar results.

AFFILIATES. Some or all of the content provided in this communication may be provided by an affiliate of The Company. Content provided by an affiliate may not be reviewed by the editorial staff member. Our affiliates may have their own disclosure policies that may differ from The Company’s policy.

TERMS OF USE. By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here http://oilprice.com/terms-and-conditions If you do not agree to the Terms of Use http://oilprice.com/terms-and-conditions, please contact Oilprice.com to discontinue receiving future communications.

The information contained herein may change without notice.




Back to homepage

Leave a comment
  • Dan on June 07 2017 said:
    If you sold one EV but now 15, your market is 15 times larger. Still losing money. Investors are tired of Musketeers.
  • John Scior on June 08 2017 said:
    Your opening line says it has nothing to do with OPEC. SInce OPEC does to some degree control the supply of oil, and hence the price of oil. your opening sentence seems to be off. One of the attractions of the "new" electric vehicle is that even if the upfront cost might be higher, the fuel cost is diminished when gasoline prices are high and the EV as a substitute is cheaper to operate. The equation falls in favor of gasoline powered vehicles when the price of oil is at a low point.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News