In an interview on 27 August, 2017, the Executive Vice-President of Chile's Corporation for the Promotion of Production ("CORFO"), Eduardo Bitran, announced that CORFO and the National Service of Geology and Mining ("Sernageomin") are conducting surveys in the La Cobaltera area in Chile's Atacama region in search for cobalt deposits. Cobalt deposits are also known to exist in the Coquimbo region.1
Bitran cited CORFO's expectations that cobalt demand should considerably increase in upcoming years, and noted Chile's potential for developing this mineral: "If we were to produce 15,000 annual tons of cobalt by 2035, we would be talking about a business worth USD $975 million, considering the current price of this mineral".2 A report on La Cobaltera's suitability for cobalt mining is scheduled to be released later this month.3
This could be an interesting opportunity for Canadian investors, as demand for cobalt is set to increase by 34% per year until 2026, and by 2021 demand could fall short of production by up to 8,000 tons. Cobalt at the London Metal Exchange traded at $32,000 a ton in late 2016, and increased to $56,000 a ton in 2017. These trends go hand in hand with increased cobalt usage in battery manufacturing for the electric car industry, which will be further boosted by China's recent announcement to join France and the United Kingdom in setting a ban on sales for all fossil-fueled powered vehicles.4
Even though over one half of the world's cobalt production originates from the Democratic Republic of Congo (DRC), CORFO has uncovered records indicating that La Cobaltera area being surveyed once produced cobalt with an average ore grade of 7.3%, which is more than double of DRC's current 3%. The Chilean Agency for Energy Efficiency recently cited the Technical University Federico Santa Maria's Department of Metallurgical Engineering and Materials' finding that between 1844 and 1944, La Cobaltera produced up to 20,000 tons of cobalt per year.5 Bitran also cited estimates that copper mining tailings contain between 0.2%-0.3% of cobalt, as well as gold, silver, copper, molybdenum, and rare metals, which could begin to be mined in the near future following CORFO's initiative to promote the exploitation of tailings through technological developments and its Summit on Mining Tailings on 2 August, 2017.6
The renewed search for cobalt is but one of the mining endeavors undertaken by Chile's CORFO and Sernageomin. On similar matters, we would like to bring to your attention that in December 2017, Chile is expected to announce the companies that won its bidding process for lithium projects in the northern part of the country, a region that is known for holding over one half of the world's lithium reserves. CORFO and Sernageomin are also considering promoting the processing of copper into copper foil in Chile, a product which is used in the manufacturing of lithium-ion batteries and which costs around three times what copper in cathode form does.7
Footnotes
[1] El Mercurio de Valparaiso, "Entrevista Eduardo Bitran, Vicepresidente Ejecutivo de Corfo" (27 August 2017), online: http://www.mercuriovalpo.cl/impresa/2017/08/27/full/cuerpo-principal/18/
[2] Agencia Chilena de Eficiencia Energetica, "VPE de CORFO, Eduardo Bitran: "Con Cobalto, Cobre Limpio y Litio tenemos una Nueva Mineria y Manufactura" (29 August 2017), online: https://www.acee.cl/wp-content/uploads/2017/09/Lun-1.jpg
[3] El Mercurio Online, "Las Opciones de Chile para Explotar Cobalto, Reafirmar su Liderazgo Minero y Mover US$1,000 Millones Mas" (25 August 2017), online: http://www.emol.com/noticias/Economia/2017/08/25/872507/Las-opciones-de-Chile-para-explotar-cobalto-reafirmar-su-liderazgo-minero-y-mover-US1000-mas.html
[4] Bloomberg, "Hunt for Next Electric-Car Commodity Quickens as Prices Soar" (23 August 2017), online: https://www.bloomberg.com/news/articles/2017-08-22/hunt-for-next-electric-car-commodity-accelerates-as-prices-soar; Bloomberg Markets, "Owner of $1Billion Cobalt Project Says Rally is Far from Over" (5 June 2017), online: https://www.bloomberg.com/news/articles/2017-06-05/owner-of-1-billion-cobalt-project-says-rally-is-far-from-over; Bloomberg Technology, "China Fossil Fuel Deadline Shifts Focus to Electric Car Race" (10 September 2017), online: https://www.bloomberg.com/news/articles/2017-09-10/china-s-fossil-fuel-deadline-shifts-focus-to-electric-car-race-j7fktx9z
[5] Agencia Chilena de Eficiencia Energetica, "Demanda Mundial de Cobalto deja Abierta una Gran Oportunidad de Negocio para Chile", (5 September 2017) online: https://www.acee.cl/wp-content/uploads/2017/09/Lun-1.jpg
[6] El Mercurio Online, "Las Opciones de Chile para Explotar Cobalto, Reafirmar su Liderazgo Minero y Mover US$1,000 Millones Mas", (25 August 2017) online: http://www.emol.com/noticias/Economia/2017/08/25/872507/Las-opciones-de-Chile-para-explotar-cobalto-reafirmar-su-liderazgo-minero-y-mover-US1000-mas.html; CORFO, "SUMMIT Relaves Mineros: Los Yacimientos del Futuro", online: https://www.corfo.cl/sites/cpp/actividadevento/02-08-2017_summit?resolvetemplatefordevice=true; CORFO, "Lanzamiento Programas Tecnologicos de Mineria en Relaves", (20 January 2017) online: https://www.corfo.cl/sites/Satellite?c=C_NoticiaNacional&cid=1476718796896&d=Touch&pagename=CorfoPortalPublico%2FC_NoticiaNacional%2FcorfoDetalleNoticiaNacionalWeb
[7] Agencia Chilena de Eficiencia Energetica, "VPE de CORFO, Eduardo Bitran: "Con Cobalto, Cobre Limpio y Litio tenemos una Nueva Mineria y Manufactura", (29 August 2017) online: https://www.acee.cl/wp-content/uploads/2017/09/Lun-1.jpg
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