By Jason Smith
The high-growth electric vehicle market has stoked the market for cobalt.
Of particular note 42 per cent of the world’s cobalt supplies find their way into the manufacture of lithium-ion batteries that power electric vehicles. And between this demand and the rise of stationary storage for clean energy sources like wind and solar, the market for cobalt is estimated to grow at a robust 4 to 5 per cent annually through 2030. We have experienced a similar meteoric rise in lithium carbonate values over the past two years now to be replicated by the impending cobalt shortage.
The Democratic Republic of the Congo (“DRC”) supplies up to 60 per cent of the world’s cobalt but posses an ethical dilemma for end users of lithium ion batteries with some of the major players refusing to purchase cobalt from the Congo.
Companies like Apple, Google, Microsoft, Samsung and Toshiba (to name a few) have helped to form the Electronic Industry Citizen Coalition (“EICC”). One of the EICC’s key initiatives is develop supply chains that avoid sourcing materials from areas like the DRC, a country where a distinct element of its mining industry is known to employ child labour.
With Bloomberg New Energy Finance predicting electric vehicle demand will account for up to 54 per cent of new cars sold by 2040, the corporate social responsibility concerns around cobalt have the potential to create a bottleneck for this key component of lithium ion batteries.
Helping to alleviate this possible bottleneck are companies like Explorex Resources Inc. (CSE: EX). This company has teamed up with a world leader in battery and lithium manufacturing and is building a portfolio of cobalt and other energy metal projects in safe jurisdictions around the world.
The Backing of a Battery-Metal Behemoth
In support of its efforts to identify and acquire good cobalt projects, Chinese lithium manufacturer Ganfeng Lithium has agreed to financially back Explorex in its search and acquisition for new sources. Ganfeng has initially pledged $1 million to kick off this initiative.
The pairing of Ganfeng and Explorex reunites the latter company’s management team with the Chinese manufacturer.
Explorex CEO Gary Schellenberg explains, “In the early 2010s, we lead a company to acquire an array of quality lithium properties and were looking for an end-user to assist with funding the advancement of the projects. We introduced ourselves to a young lithium company, Ganfeng Lithium, with around a $200 million market cap and engaged them in a strategic partnership…
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