67 WALL STREET, New York - April 16, 2014 - The Wall Street Transcript has just published its Metals & Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Mining Safety and Environmental Concerns - Global Iron Ore Production - Emerging Market Infrastructure Construction - Chinese Demand for Industrial Metals - Zinc Supply Deficit - Demand Growth in Zinc - Accelerated Grid Spending in China - Copper Demand in China
Companies include: Fortune Minerals Limited (FT.TO) and many more.
In the following excerpt from the Metals & Mining Report, the President and CEO of Fortune Minerals Limited (FT.TO) discusses company strategy and the outlook for this vital industry:
TWST: Which of the metals or minerals that you produce - I believe they include cobalt, bismuth, gold and copper - are most closely tied to the company's fortunes?
Mr. Goad: It's quite interesting because NICO has four payable metals, and at the present time using base case price assumptions, about 39% of the revenue comes from cobalt sulfate heptahydrate, about 33% comes from bismuth products - needles, ingot as well as oxide - and 1% comes from copper. And actually, 33% comes from gold and 27% from bismuth; that's a correction. So at this point in time, gold of course is trading currently at around $1,300 an ounce; we've used $1,350 in our base case assumption. If gold were trading at around $1,500 an ounce, gold would likely be the dominant metal in the deposit. So metal, as prices vary - so the three principal core products being cobalt, gold and bismuth, whatever their prices at any given time can impact the ratio or the revenues.
TWST: Recently, Tesla announced plans to construct a $5 billion lithium-ion factory. How might that affect Fortune Minerals?
Mr. Goad: That's very significant because both of the specialty metals that are contained in the NICO deposit have supply concerns. Cobalt for example, 61% of the mine production is currently sourced from not so Democratic Republic of the Congo. The 42% of the refinery production comes from China. China is not a politically unstable country like the DRC, but it does have policy risks.
So manufacturers, particularly those in North America, will have comfort in being able to have a strategic, North American, fully vertically integrated source of supply, and particularly a company that is focused on the production of cobalt sulfate used in the manufacture of lithium-ion batteries. It's notable that about 8% growth is occurring in the cobalt market, whereas in the battery market - which is responsible right now for 42% of global cobalt supply - is growing at 20%. So the forecasts are that the demand for cobalt in batteries will exceed all of the uses for cobalt because of the significant growth.
Tesla in particular is; the costs that are associated with its electric vehicles are principally because of the high cost of lithium-ion batteries. Lithium batteries can contain anywhere from zero to 60% cobalt, and it's interesting that in lot of recipes for lithium-ion batteries, there is actually more value in cobalt than there is in lithium. The technology of this being employed by Tesla uses a nickel-cobalt-aluminum battery that's been developed by Panasonic, and it contains about 9.5% of cobalt. So it's going to be a very important consumer of cobalt because of - the plant in itself is anticipated to double the production of lithium-ion batteries globally.
I could say the same kind of thing for bismuth, because about 80% of bismuth supply...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.