Greenstone Resources confident in cobalt demand as it considers parting ways with WA project

“I don’t think a lot of people really realize that here in Australia there are only…six cobalt projects on which one or more PFS has been completed and the Mt Thirsty project is the cobalt project for the highest quality out of the six. of them.”

A Galileo spokesperson acknowledged discussions with Greenstone but noted that no decision on a list had been made.

Like several “critical minerals” needed to make batteries, cobalt prices have skyrocketed over the past two years amid strong demand for electric vehicles and, particularly recently, supply issues.

The Democratic Republic of the Congo accounts for around 70% of the cobalt supply, but presents several environmental, social and governance risks, including labor exploitation, and much of it is controlled by China. Russia is producing another 4% of the supply, but uncertainty has increased following its invasion of Ukraine.

However, some automakers and battery manufacturers are looking to reduce or discontinue their use of cobalt, dubbed the “battery blood diamond”, including using lithium iron phosphate cells, as opposed to nickel-manganese-cobalt chemistries and nickel-cobalt-aluminum. .

Hansen said new technologies that could impact battery metals are commonly discussed, but the reality is that they can take years to develop and then be approved for use. He added that battery makers wanted more sourcing from countries like Australia given the difficulty of differentiating unethically produced sourcing from the DRC.

“There are countless universities, scholars and companies around the world studying alternative battery technology,” he said.

“The big hurdle they’re trying to overcome is not being, I guess, beholden to a specific product or a specific country for sourcing. And then secondly, to also meet consumer demands.

“And from what I understand at the moment, there’s nothing commercially available that ticks all of those boxes without the application of cobalt.”

Another source of cobalt demand outside of electric vehicles is commercial aircraft, Canaccord analysts said, and a “tightly balanced market” was likely in 2022, albeit with supply risks from the DRC.

Governments are increasing their investments in “critical minerals”, with the Ontario government this month being the latest to unveil its strategy to secure supplies of lithium, nickel, cobalt and rare earths.

The Australian government this month spent an additional $243 million on a handful of critical mineral companies, adding high-purity alumina and silicon – which are used in lithium-ion batteries and semiconductors – to its list of 26 “priority critical minerals”.

Mr Hansen said that unlike other new mining projects which can take five to 10 years from discovery to production, Greenstone’s Mt Thirsty surface mine project in Western Australia could “break new ground” three years from now given the previous PFS.

He said governments were very concerned about future supply, aware of China’s dominance in several critical minerals and previous moves to influence markets, including rare earths.

“And more recently what’s happening in Ukraine is forcing governments and businesses to focus very much on that energy independence again and tied to that is that gradual decarbonization of the respective economies and a lot of that is going to be that shift from fossil fuels to batteries,” he said.

“And with more batteries, you’ll need more cobalt, but the projects and the pipeline just aren’t there.”

Galileo shares jumped 7% to 22¢ on Monday on fresh assay results for nickel, cobalt, palladium and platinum from its Norseman project near WA. Greenstone fell 2.7% to 3.5¢.