To what extent does Cobalt represent the
greatest value for battery metal investments?
Alberto Migliucci
CEO & Founder, Petra Commodities
Hot Commodities - Materials driving technology
In the 1950’s self-made millionaire Ferruccio Lamborghini made
his fortune by building tractors in Italy and then set out to build
a more powerful, lighter weight, quieter, V12 powered car than
anything available from the likes of Ferrari.
Petra Commodities 2017
The use of new materials enabled Lamborghini to create his first
Superleggera made from lightweight aluminium in the 1960s.
Almost all cars globally were and still are made from virgin steel.
Petra Commodities 2017
Forbes Indonesia May 2015
2017 the Future is Electric
The “Lithium Ion” Age.
Current industry opinion anticipates that up to 40% of vehicles sold
in 2040 will be electric, from a base of less than 1% of global sales
today.
Lithium-ion batteries were first commercially introduced by Sony in 1991.
In the past decade, the acceptance of rechargeable batteries (mostly lithium-ion batteries) has been essential
to modern technology, powering smartphones, laptops, tablets, medical devices and power tools.
“New Energy Metals” – Lithium & Cobalt have become the DNA of disruption
i) driven by the global push to reduce carbon emissions:
ii) increase dependence on renewables
iii) and break away from traditional infrastructure networks.
Charging The Future in numbers
While lithium grabs the headlines because of its use in batteries, it is just one of the minerals being used, and in fact, isn’t
even the most common element in most lithium-ion batteries. Depending on the battery type, the strategic mined metals
include cobalt, graphite, nickel, zinc, copper, manganese and aluminium, and these will likely become increasingly
important raw materials in the new energy economy
Lithium
“…One commodity that is looking as good as gold is lithium, the lightest
metal on earth and referred to as “white petroleum,” is an essential
component of modern batteries, which are expected to enjoy boom
years ahead as electric cars become more commonplace…”
Alberto Migliucci
Petra Commodities CEO
FORBES Indonesia June 2016
“In order to produce half a million cars a year…we would basically need
to absorb the entire world’s lithium-ion production.”
Elon Musk
Tesla CEO
Forbes Indonesia June 2016
Lithium
Hard to get direct exposure to its positive story?
• The metal Lithium, the lightest metal on earth but it is a
heavyweight in the rechargeable battery sector.
• While worldwide lithium production is dominated by only four
major lithium producers, there are currently over 50 junior
exploration companies either seeking an economic lithium
 Problem is, there isn’t a traded market for lithium, unlike gold, or
other key metals or commodities. Lithium doesn’t have a spot market
and isn’t freely traded on an exchange.
 Prices are negotiated individually through contracts between buyers
and sellers, and there are numerous grades of the metal as well,
making it extremely hard to get direct exposure to its positive story.
So far the main way to play
lithium has been to look for the
next big play, with junior miners
enjoying spectacular gains just
by mentioning lithium tenements
in press releases.
Hard to get direct exposure to Lithium’s positive story?
So far the main way to
play lithium has been to
look for the next big
play, with junior miners
enjoying spectacular
gains just by mentioning
lithium tenements in
press releases
Lithium story “spike”
The piece below came out on Friday, and was picked up by ST on Monday 27 March. On that day Alliance was a top 7 stock and traded S$37m. This is
40x more value traded than Tawana. Alliance share price is up 187% since the 18 Jan ’17 announcement on commencement of feasibility study, which
is a fundamental change. Tawana is up 45%.
Cobalt
“…If you look at the constituents of the new
energy Lithium-ion battery, we believe Cobalt is
a stand out, most the advanced batteries are
cobalt-based. with the battery market expected
to grow 6X by 2025.
Cobalt is a important share of this
Market and demand for the metal
is expected to grow at an average
annual rate of 5-5.5% over the
next 5 years.…”
Alberto Migliucci
CEO Petra Commodities
FORBES Indonesia December 2016
COAL & MINERALS ASIA Feb, 2017
Forbes Indonesia December 2016
Cobalt
 In U.S the metal is on critical list
seen as essential to its
economic health and national
defence, the U.S. The U.S.
Geological Survey
recommended to add the cobalt
compounds to the National
Defense Stockpile
 The U.S. currently consumes
approximately 13% of the
world’s cobalt supply, with this
projected to grow to 15% by
2020.
Source: Visual Capitalist, Petra Commodities
Cobalt
Concentration Risk
 Greater than 55% world’s cobalt supply from the
Democratic Republic of Congo (DRC).
 DRC possesses 60% of the world’s cobalt reserves
and resources.
 There is a clear supply uncertainty hanging over the
global cobalt market given the treacherous
environment of the DRC
 Congo’s central bank reported “Production of
cobalt, slipped 0.8% to 21,493 tonnes in the third
quarter and is down 9% [in 2016].”
Supply Conundrum
Cobalt
Source: Visual Capitalist
Supply Conundrum
Cobalt
96% comes as a by-product of copper or nickel mining
.
.
Petra Commodities 2017
Given these genuine concerns over future supply, end users are
looking at alternate supplies and pressure is mounting on companies
such as Apple, Samsung and Tesla to find sustainable and ethical
sources of cobalt for their batteries
Philippines - cobalt-bearing nickel
mines are shut-in for
environmental/political reasons
Australia and Indonesia - potential
good source for cobalt-bearing
nickel mines
The Energy Future
Petra Commodities sees strong tailwinds for EV penetration, with Asia being
at the heart of the EV charge with Japan speeding ahead of the rest of the
world, now boasting more electric car charging stops than petrol stations, a
result of the Japanese government subsidies for electric, hybrid and other
low-emission cars.
• The race towards EV superiority is not only an industrial battle
fought by the major automakers. It is also increasingly a strategic
issue for some of the world’s largest economies.
• Europe, the US, Japan and China will all compete to ensure their
auto industries remain relevant into the next decade either to
boost growth or protect jobs. Raw materials in batteries and
infrastructure offer a path to investing in the trend.
Petra Commodities 2017
The Energy Future
Rechargeable batteries containing a number of mined materials (depending on the type) including cobalt, lithium,
nickel, graphite, zinc, manganese, aluminium and phosphorus will shine brightly as they continue to form part of
the energy future.
The Energy Future
Former CS Banker launches investment firm
Alberto Migliucci, former head of energy, oil and gas mining in Asia at Credit Suisse, has set-up a boutique capital
and advisory firm with a focus on natural resources deals in Asia.
Petra Commodities opened on August 29, with offices in Jakarta, Singapore and Sydney. Its staff include Asian
based ex-senior banker, Marcel Kreis, former head and chairman of Asia Pacific private banking for Credit Suisse.
Source: AsiaMoney Plus, September 4, 2013
Thank You –
Panel Discussion
Friday 7th April
09:50
Ian Telfer – Chairman Goldcorp
What Does The Growing Demand for Energy Storage
Mean for Battery Metals?
John Mulligan – World Gold Council
Forbes Indonesia May 2015
Coal & Minerals Asia 2013
About PETRA COMMODITIES
Petra Commodities is “an investment banker’s & geologist’s perspective to Asian resources”
Petra Commodities is dedicated to sourcing, investing in and executing the best natural resources & private deals in Asia, through its established network of corporate and ultra-high net worth individuals.
Petra Commodities was founded by Alberto Migliucci, senior investment banker and geologist with more than 25 years experience including at Credit Suisse’s Managing Director Global Energy Group/ Head of Mining
& Metals, Oil & Gas in Asia, where he led the firm to the number one position in the sector’s advisory league tables in Asia. He was also former Head of Energy & Mining – Asia Pacific for Standard Bank, and worked for
other banks like Societe Generale (France) and Sumitomo Bank of Japan. Over his career Alberto has closed more than USD100billion of deals.
Petra Commodities structures and executes its chosen transactions and invests its own capital alongside its clients’ to optimize returns for all investors.
Petra Commodities is able to provide a full suite of investment advisory and banking services across the life cycle of natural resource projects, including, M&A, project finance, debt and equity capital structuring and
sourcing and principal capital investment. Petra Commodities is currently engaged on strategic advisory and capital solutions for energy and mining projects in Asia and Australia.
For more information please contact
Petra Commodities
Head Office: 1 Scotts Road, Suite 16 – 03:
Singapore 228208
Email: [email protected] | www.petracommodities.com
Important Notice
This document, together with any information communicated by Petra Commodities Pte Ltd in any presentation or discussion relating to this document, (collectively, “information”) is confidential,
and has been prepared and communicated by Petra Commodities Pte Ltd on condition that it is for the exclusive information and for the purpose of providing you with introductory background
information only. No information may be used or relied on by any other person, or for any other purpose, without Petra Commodities’ prior written consent. The information may not be
reproduced, disclosed to any person or referred to in any document, by any person for any purpose (except to the extent required by law or a regulatory authority).
The information, including any opinions and proposals, is subject to various assumptions and qualifications (the appropriateness of which are subject to significant uncertainties and
contingencies, all of which are outside the control of Petra Commodities). Any forecast, estimate, projection or other prospective opinion in the information (“projection”) may be based on
information and assumptions supplied to Petra Commodities by a third party, reflects the author’s judgment on the date of this document and is subject to change without notice (but without any
duty to provide you with updates) it is provided on the understanding that assumptions, on which projections are based, may not be realised and that unanticipated events and circumstances
may occur.
To the greatest extent permitted by non-excludible law, Petra Commodities, its related bodies corporate, and their officers, employees and agents (“Petra Parties”):
a.
make no representation or warranty, express or implied, as to the accuracy, currency, reliability, suitability for your needs or completeness of the information and
b. disclaim liability for (and the information is provided on condition that all Petra Parties are released from) any claim, loss, damage, cost or
expense, whether direct, indirect, consequential or otherwise, arising (whether in negligence or otherwise) out of or in connection with the
information, any reliance on it or any omissions from it.
The information does not constitute, and under no circumstances is to be taken as, financial advice or an offer of (or invitation to make an offer for) advisory, financial, underwriting or other
services, or other securities, products or facilities.
Petra Commodities and its related entities (“Petra”) transact as principal, and on behalf of clients, a diverse range of services and products to and with clientele and market participants globally.
Petra may (including on an undisclosed basis) transact with or have an interest in any person, thing or matter referred to in the information, and may receive related benefits. Such persons may
include your customers, competitors, suppliers, investors, counterparties and agents.
11/4/2017