U.S. To Produce CobaltUnited States Plans to Increase Domestic Cobalt Production
By Damon van der Linde – Exclusive to Cobalt Investing News
A recently released reportby the U.S. Department of Energy (DoE) advocates the mining oflocally-sourced cobalt to further reduce the dependency on theDemocratic Republic of Congo (DRC) for access to minerals that will helpthe United States in its pursuit for clean energy technologies. The2010 Critical Materials Strategy predicts that the U.S. shouldbe able to meet its future needs for cobalt—a key component inbatteries, including those of hybrid electric vehicles (HEVs)—withoutrelying on the DRC.
Although the United States is the world’s largest consumer of cobalt, it does not have well-established primary cobalt and nickelmining facilities, which is where the vast majority of cobalt issourced as a byproduct. The United States has not mined cobalt since1971 and has not refined the mineral since 1985. The DRC dominatescobalt production while presenting a high political risk as it ranksbelow the 10th percentile in all World Governance Indicators (WGI).About 40 percent of global cobalt mining occurs in DRC while only around2 percent of global refining of cobalt into metal takes place in thecountry. As the 2010 Critical Materials Strategy report states:“Several additional pieces of information are helpful for understandingdemand-supply mismatches for the United States. Import dependence andsupply risks in general should be examined over the entire supply chain[…] This indicates that countries importing refined cobalt can still beindirectly dependent on cobalt from DRC, a politically unstablecountry.”
In recent decades, the United States has been recovering very smallamounts of cobalt from Missouri’s lead ore and from the mining andsmelting of platinumgroup metals (PGMs) in Montana. Imports from at least nine othercountries with significant cobalt production and reserves, secondarysources (i.e., recycled scraps and spent materials) and stock releaseshave been the United States’ major sources of cobalt.
Currently, several projects are under development to expand cobalt mining and production in the United States.
Formation Metal’s (TSE:FCO)Idaho Cobalt Project plans to produce cobalt as a primary product inone to two years, estimating 1,525 tons of metal over a minimum ten yearmine life. The company states that the project’s output will beequivalent to 3.3 percent of global supply and will be able to provide14.9 percent of North America’s demand. The United States is currentlyabout 75 percent import dependent upon cobalt coming from Norway, Russiaand China. Recycled cobalt from purchased scrap helped the UnitedStates meet 24 percent of its domestic consumption in 2009.
Two other U.S. projects will produce cobalt as byproducts—the Eagle Project mine in Michigan and the NorthMet Project copper-nickel-PGM mine in Minnesota.
The Eagle Project is a nickel and copper mine proposed by Kennecott Minerals Corporation, a subsidiary of Rio Tinto (NYSE:RIO),began excavation in 2010 and plans to begin production in 2013,surrounding both local support and opposition for the operation. It isexpected that approximately 16,000 tons of nickel and approximately10,000 tons of copper will be produced annually.
PolyMet (TSE: POM)is currently preparing a supplemental draft environmentalimpact statement for the construction and operation of its NorthMet anopen pit mine.
In April 2009, the U.S. Department Defense (DoD) established a systemthat would identify, on an ongoing basis, those strategic and criticalmaterials required for national security. The report recommended holdingphysical reserves of 13 materials (including cobalt) while continuingto monitor and study 40 other materials (including gallium, indium,tellurium and yttrium).