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By Shane Lasley
Mining News 

Critical Minerals Alaska – Cobalt

More EVs, unstable supply put battery metal on US critical minerals list

 

Last updated 6/22/2018 at 4:31am

Critical battery minerals Alaska, cobalt exploration, Trilogy Metals

Rob Lavinsky, iRocks.com, Creative Commons

This is a beautiful specimen of covellite and pyrite is from the Democratic Republic of Congo, a country that currently provides more than half of the world's current cobalt supply, primarily as a by-product of copper.

Cobalt is an essential ingredient to optimizing the performance of batteries in the growing number of electric vehicles on global highways, yet essentially none of this battery metal is mined in the United States. With at least one advanced stage exploration project in Alaska looking into the potential of producing cobalt alongside its copper, America's 49th State could provide a domestic source for this critical metal.

In its annual report, Mineral Commodity Summaries 2018, the United States Geological Survey forecasts that the rechargeable battery sector is expected to drive the demand of cobalt higher faster than the mining sector will bring new supplies of the battery metal to market.

"As a result, the global cobalt supply was expected to remain limited in the near term," USGS penned in the annual report.

This limited supply could affect more than U.S. carmakers such as Tesla Inc.

"Cobalt's diverse uses-particularly in parts for aircraft turbine engines; in numerous magnet applications, including marine propulsion systems, missile guidance systems, sensors, and radar; and in machine tools-make it important to the U.S. military and civilian industries," USGS wrote in a December report on cobalt.

The United States currently gets roughly 75 percent of its cobalt supply from overseas suppliers, with most of the balance coming from recycling.

"This high reliance on imports increases the potential for supply disruption and high prices during supply shortfalls," according to the USGS.

This import-reliance is further complicated by the fact that the Democratic Republic of Congo (DRC) supplies more than half of the world's mined cobalt.

Combined, these factors have prompted the USGS to place cobalt on the final list of 35 minerals deemed critical to the United States.

There are a number of deposits and prospects in Alaska that could provide the United States domestic sources of cobalt, including the high-grade Bornite copper deposit at Trilogy Metal Inc.'s Upper Kobuk Mineral Project in the Ambler Mining District.

"It has become imperative that the United States secure its own sources of critical minerals," said Trilogy Metals President and CEO Rick Van Nieuwenhuyse.

Higher prices, less cobalt

A key ingredient in the cathodes of the lithium-ion batteries powering the growing number of EVs on the road today, cobalt has rocketed from around US$25 per pound a year ago to more than US$40/lb in recent weeks.

This higher price – along with the prospect that growing demand and limited supply could drive the price even higher – however, has battery manufacturers looking at less cobalt-intensive recipes for cathodes.

Tesla, which produced 34,494 of its three models of electric cars during the first quarter of this year, is among the EV manufacturers developing cathode chemistries that require less cobalt.

"Cells used in Model 3 are the highest energy density cells used in any electric vehicle," Tesla CEO Elon Musk penned in a May 2 letter to shareholders. "We have achieved this by significantly reducing cobalt content per battery pack while increasing nickel content and still maintaining superior thermal stability."

While Tesla and other rechargeable battery manufacturers are looking at ways to further reduce the amount of cobalt, researchers and analysts do not see a scenario where the reduction of cobalt per battery can come close to offsetting the growing number of batteries that will be needed in the coming three decades.

In a recent report, McKinsey Basic Materials Institute predicts that cathodes with nickel-manganese-cobalt chemistries with ratios of 8-1-1 or 6-2-2 will be the norm in the coming decade.

That means that cobalt is expected to make up somewhere between 10 (8-1-1) and 20 percent (6-2-2) of the cathodes in the coming generation of EVs.

Tesla said the cobalt content of the nickel-cobalt-aluminum cathode being put into its Model 3 cars is already lower than next generation 8-1-1 ratios.

Even so, roughly 4.5 kilograms (about 10 pounds) of cobalt goes into the average Tesla produced today, according to Benchmark Mineral Intelligence – a world-leading analyst specializing in the battery materials lithium, cobalt, nickel and graphite.

Supply-side complications

Uncertainty and instability on the supply side of the equation further complicates matters for the cobalt expected to be needed in the coming decades.

One of the difficulties is cobalt is seldom mined as a standalone metal. Instead, this increasingly needed battery metal is typically produced as a byproduct at copper and nickel mines. This means that any future cobalt mines would likely need to consider the economics of the moneymaking metal in the deposit.

"This situation limits producers' flexibility in adjusting the amount of cobalt mined in response to changes in demand and can result in periods of oversupply or shortage," according to the USGS.

While at lower prices, the cost to recover cobalt from copper or nickel mines may not have been economically viable, the demand electric vehicles are putting on this metal has companies taking a closer look at the feasibility of recovering cobalt exploring and developing copper deposits in the United States.

The supply side of the cobalt equation is further complicated by the fact that roughly 58 percent of the world's newly mined cobalt currently comes from DRC, a country that is considered politically and socially unstable.

"This country has a high-risk index for doing business owing to poor infrastructure, resource nationalism, a high perception of corruption, and a lack of transparency as well as wars," USGS wrote in its cobalt report.

Amnesty International is putting pressure on car companies using cobalt from DRC, due to the human rights abuses it has identified in the African country.

"As demand for rechargeable batteries grows, companies have a responsibility to prove that they are not profiting from the misery of miners working in terrible conditions in the DRC," said Seema Joshi, head of business and human rights, Amnesty International. "The energy solutions of the future must not be built on human rights abuses."

This pressure on automakers could add to the catalysts to establish domestic sources of this critical metal.

"With the market interest in finding significant cobalt sources outside of the Congo – where child labor and worker exploitation have been highlighted by Amnesty International and others as problematic for the auto and electric battery Industries – defining a large, North American cobalt resource has become a priority for the company," said Van Nieuwenhuyse.

Investigating Bornite cobalt

Trilogy Metals' endeavor to establish a North American cobalt resource is currently focused on Bornite, an enormous copper project in Northwest Alaska.

"With cobalt currently trading over US$40 per pound, we believe the cobalt potential at Bornite could be significant and is worth pursuing," Van Nieuwenhuyse said earlier this year.

According to the most recent resource calculation, the world-class Bornite deposit hosts 2.7 billion lb of copper in an open-pit resource for Bornite averaging roughly 1 percent copper; and another 3.7 billion lb in a deeper underground resource that averages about 2.9 percent copper.

Knowing that the carbonate-hosted mineralization at Bornite carries cobalt, Trilogy Metals began looking into the viability of potentially recovering this battery metal as a by-product of the copper there.

"We have known that cobalt occurs with copper mineralization at Bornite for some time," said Van Nieuwenhuyse. "With the completion of our metallurgical work related to copper, we decided to put forth further effort to understand how the cobalt was distributed."

The initial metallurgical work shows promise that a separate cobalt concentrate could be produced at Bornite and Trilogy is now having a resource calculated for the battery metal.

At a cut-off of 100 parts per million (0.01 percent), assays from Bornite range from 0.01 to 0.04 percent cobalt. Drilling has also encountered higher grade cobalt mineralization, such as 18.44 meters of 0.35 percent cobalt in RC-34; 36.85 meters of 0.1 percent cobalt in RC11-0187; and 6.79 meters of 0.42 percent cobalt in RC11-0184.

Based on this limited information, Mining News calculates that the current resource area at Bornite could contain roughly 65 million lb of cobalt to go along with roughly 6.4 billion lb of copper already identified there.

An NI 43-101-compliant resource calculation for the cobalt in this deposit is expected to be released by the end of May.

Bornite-like prospects

Bornite is not the only carbonate-hosted copper target in The Last Frontier with cobalt potential.

According to a recent study by USGS and the Alaska Division of Geological & Geophysical Surveys, most of the Brooks Range where Bornite is found has the potential to turn up similar cobalt-enriched copper deposits.

A couple of carbonate-hosted copper targets on the southern slopes of the Brooks Range about 100 miles northwest of Bornite – Omar Peak – have interesting cobalt credits.

Novagold Resources collected samples at Omar in 2007 with up to 34.3 percent copper, 0.85 percent zinc, and 0.4 percent cobalt.

Less is known about the cobalt content at Peak but the mineralogy shows similarities to Omar.

In all, the USGS and DGGS has identified a belt extending more than 300 miles along the south slope of the Brooks, and the entire north slope of this range that extends across the breadth of Alaska, is prospective for carbonate-hosted copper deposits that could contain cobalt.

The federal and state geological agencies also ranked the Nome Complex on the Seward Peninsula as highly prospective for these types of deposits.

The Nome Complex consists of a roughly 2,500-square mile area immediately northeast of Nome and a separate, slightly smaller area about 30 miles to the north.

The geology of the copper enriched deposit found in the Nome Complex is not well understood but USGS geologists have drawn some comparisons to the carbonate-hosted copper deposits and prospects in the Brooks Range, about 200 miles to the northeast.

A span of the Wrangellia Terrane that blankets PolarX Ltd's Alaska Range property is another area USGS and DGGS see as a good place to look for cobalt-bearing copper deposits.

Wrangellia cobalt

The Wrangellia Terrane also happens to be prime hunting grounds for platinum group metal-nickel deposits with decent amounts of cobalt.

The most advanced PGM deposit along the Wrangellia Terrane – which runs the length of the Southeast Alaska Panhandle before arcing through southwestern Yukon and into Southcentral Alaska – is Nickel Creek Platinum Corp.'s Nickel Shäw (formerly known as Wellgreen) in the Yukon.

Situated about 60 miles east of the Alaska-Yukon border, Nickel Shäw hosts 6 million oz of platinum group metals, 2 billion lb of nickel, 1 billion lb of copper and 120 million pounds of cobalt in the measured and indicated resource categories.

There are intriguing signs that similar PGM-nickel-copper-cobalt deposits could be lurking in the Alaska portion of the Wrangellia, such as the Man property about 165 miles southeast of Fairbanks.

Most holes that drilled through the Eureka zone mineralization at Man cut thick zones averaging 0.015 percent to 0.018 percent cobalt.

Pure Nickel, the former owner of Man, said that a review of drilling shows that all holes that cut the Eureka zone encountered disseminated sulfide mineralization with strikingly similar grades along seven kilometers (4.5 miles) in the central part of a longer trend of mineralization known as the Alpha Complex.

One hole drilled in 2010 cut 319.7 meters averaging 0.121 grams per metric ton palladium, 0.054 g/t platinum, 0.018 percent cobalt, 0.25 percent nickel and 0.09 percent copper. Another hole drilled in 2013 cut 205.2 meters averaging 0.122 g/t palladium, 0.061 g/t platinum, 0.017 percent cobalt, 0.24 percent nickel and 0.09 percent copper.

Despite the properties promise, Pure Nickel relinquished the state mining claims covering Man to save money during the recent downturn in mineral exploration markets.

Besides Man, numerous PGM-nickel and potentially cobalt prospects are found along a roughly 200-mile section of the Wrangellia Terrane in Southcentral Alaska.

Amphitheater, which borders the Man property to the south and west; Butte Creek, located about 40 miles southwest of Amphitheater; and Talkeetna, a block of claims roughly 30 miles further along this cobalt prospective arc on the south side of the Alaska Range.

More information on the PGM projects in Alaska is available in "Critical Minerals Alaska PGEs" published in the May edition of North of 60 Mining News.

Southeast Alaska cobalt

The Southeast Alaska Panhandle may be the most prospective area for cobalt in the state. The USGS has even asked whether the silver-rich veins at Hecla Mining Company's Greens Creek Mine on Admiralty Island could also contain cobalt.

This query of the potential of cobalt at Greens Creek is not unfounded, considering that a historical mine produced cobalt, nickel and copper from a rich deposit a few miles to the northeast.

While there is little information on the amount of cobalt produced at this mine that went into operation in 1895, referred to as Funter Bay Nickel and Perkovich Cobalt, there is evidence that rich deposits of the battery metal remain.

According to a historical resource calculated in 1984, the Funter Bay deposit hosts roughly 508,000 tons of prospective ore averaging 0.15 percent cobalt, 0.34 percent nickel and 0.35 percent copper. And like the nearby Greens Creek Mine, the Funter Bay deposit is also reported to host silver, gold, zinc and lead.

Volcanogenic massive sulfide deposits similar to Greens Creek are known to contain appreciable amounts of cobalt – Windy Craggy in British Columbia, which contains roughly 0.66 percent cobalt, and the Besshi VMS deposit in Japan, which has 0.05 percent cobalt.

The VMS deposits and prospects on Constantine Metal Resources' Palmer property at the northern end of the Southeast Alaska Panhandle also hosts intriguing hints of cobalt.

Historical samples collected from the Cap prospect at Palmer returned 0.013 percent cobalt, along with silver, zinc, gold and barite. Samples from the Jarvis Glacier prospect at Palmer returned 0.016 percent cobalt, along with copper, zinc, silver and gold.

Some of the highest grade cobalt samples in the area were collected from the Claire Bear occurrence, which is on the Haines Block lands Constantine leased from the Alaska Mental Health Trust in 2014.

Samples collected from Claire Bear contained up to 0.107 percent cobalt, 0.229 percent copper, 0.07 percent tin, 0.1 percent bismuth and 0.7 percent antimony.

The potential for existing and future VMS mines in Southeast Alaska to produce cobalt, coupled with the cobalt prospectivity of this battery metal being associated with the many PGM-nickel prospects along this stretch of the Wrangellia Terrane, makes the panhandle another potential Alaska source of critical cobalt.

Critical battery minerals Alaska, cobalt exploration, Trilogy Metals

Tesla Inc.

The batteries powering electric vehicles such as this Tesla Model S require around ten pounds of cobalt, which is driving a push to establish an American supply of this critical mineral.

Editor's Note: "Critical Minerals Alaska – Cobalt" is the fifth of a series of articles to be published in North of 60 Mining News that investigates Alaska's potential as a domestic source of minerals deemed critical to the United States. At least 29 of the 35 critical minerals identified by the U.S. Geological Survey – antimony, arsenic, barite, beryllium, bismuth, chromium, cobalt, fluorspar, gallium, germanium, graphite, hafnium, indium, magnesium, manganese, niobium, platinum group metals, rare earth elements, rhenium, rubidium, scandium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium and zirconium – are found in Alaska.

CORRECTION (May 25): Mining News corrected the platinum and palladium grades from drill intercepts at the Man project.

 

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