Page 22 Contd on pg 24 By Frank Giorno The announcement in January 2020 that Glencore is in talks with electric vehicle manufacturer T esla to supply ethical cobalt for its new Shanghai China plant has created a resur gence in the cobalt market after years of un certainty about its future Closer to home the GlencoreT esla agreement on cobalt could also see the return to mining prominence in Cobalt Ontario a town that became a major silver mining centre in the late 19th and early 20th Centuries An agreement would provide T esla a secure longterm supply of cobalt and prevent shortages at its Shanghai facility which is in the world s lar gest electric vehicle market Such an agreement is a good sign for cobalt producers in Canada Canadian cobalt mining companies and refner ies such as Canada Cobalt W orks and First Cobalt are positioned to beneft from a GlencoreT esla agreement on supplying ethical cobalt In 2019 Glencore invested 5 million dollars towards the reopening of First Co balt s cobalt refnery in Cobalt On tario The refnery is North America s only permitted cobalt refnery Canada Cobalt W orks has properties in Northern Ontario that it is explor ing for developing silver and cobalt mines The metals are closely associ ated with cobalt in the past being a byproduct of silver mining such as in the historic Cobalt Ontario silver ing operations at the beginnin g of the 20th century The potentia l here is huge says Frank Basa chief executive ofcer of Canada Cobalt W orks in a 2018 inter view with CBC news G lenc or e and T esla deal on E thic al C obalt T esla is rampin g up output at its Shang hai facility dubbed the Gigafactory which was built in just 1 1 months with Chinese government support T esla s shares have rocketed to stratospheric heights as investors have become con fdent of Elon Musk s drive to make T esla into the world s lar gest mass producer and seller of electric cars In addition to T esla V olkswagen AG and BMW AG are also planning to roll out feets of electric vehicles Glencore the world s lar gest cobalt miner is in a prime position to beneft from a boom in electricvehic le sales But the compa ny absorbed losses last year because cobalt prices collapsed in mid2018 from too much supply In addition to the T elsa talk s Glen core also signed a deal to provide BMW with cobalt Direct deals with miners are rare in the autom otive in dustry Market analysts believe the agreements are a sign that carmakers are concerned about securing enough cobalt from ethical sources At present most of the world s cobalt comes from the Democratic Repub lic of Congo which produces about threequarters of the world s cobalt Much of the cobalt from DRC is pro duced from makeshift mines that have used childlabour and experienced hu man rights violations and fatalities T esla President Elon Musk has stated that his company will only use ethical cobalt According to a source involved in the negotiations both companies have concluded the terms of an agreement and are awaiting fnal review and signing of the contract by company executives and board of directors At current production rates there is enough cobalt demand However with the coming into production of T esla s Shanghai plant T esla s inten tion of opening a European facility and the announced entry of V olkswa gen and BMW into the electric vehicle feld market analysts are boasting of an increased demand for cobalt lead ing to predictions of future shortages This marks a turnaround from the oversupply of cobalt during the 2017 2018 period which led to substantial losses for Glencore as prices plunged from a high of 44 dollars per pound in 2018 to a low of 12 dollars per pound in 2019 In the days after the reported talks between Glencore and T esla cobalt prices rose modestly by 010 per pound from 1453 to 1463 per pound on the London Metal Exchange Despite a torrid year for the car indus try the bur geoning electricvehicle market ofers big opportunities for manufacturers and the companies that supply them The biggest miners are looking to grow production of met als such as copper and nickel that are needed for the electrifcation of cities and cars Everything in here runs cobalt Canada Cobalt W orks Frank Basa said in the 2018 CBC interview pointing to the pink hue in the tunnels of the Castle mine near Gowganda What they previous silver mine operators did was they just took the highgrade silver and left all the cobalt behind Nobody wanted cobalt you see In August 2019 Glencore loaned the frst tranche of a potential 45 Million loan to First Cobalt towards reopen ing the company s cobalt refnery in Deal could ha v e major dividends f or cobalt mining r efning v entur es