Cobalt continues to move up strongly

Matthew Langsford

Like we did last year with lithium and Aussie-domiciled gold producers, we have selected those companies that represent the best risk-adjusted exposures to cobalt, allowing the fund to deliver returns not correlated to resource indices. This process meant that part of the Terra team travel to a number of cobalt mines in North America last year to conduct due diligence. What we saw then is benefiting the portfolio now and we expect it to continue over the months ahead.

Cobalt price continues to move up strongly:

Source: Bloomberg

Further on the energy storage theme, China's State Council recently made supporting comments on the rollout of electric vehicles. In early February, it announced that China is planning to build 800,000 charging points in 2017,

including 100,000 public ones. Citing the National Energy Administration, 100,000 public charging points were installed in 2016 lifting the overall total to 150,000.

Additionally, a total 14,000km of highways are now equipped with charging stations (average spacing of circa 50km). The 13th Five-Year Plan (2016-2020) includes completion of a nationwide charging-station network sufficient to support an electric vehicle fleet of 5 million by 2020.

In cobalt, our largest position is in eCobalt Solutions Inc (ECS.TSX) which is a North American pure-play cobalt developer with their Idaho Cobalt Project. The project is relatively advanced with environmental permits and studies in hand offering investors a unique; fully integrated, proximal to end-user, ethical, secure source of cobalt.

Whilst we are leveraged to and benefiting from our cobalt exposures which also include Equator Resources (EQU), and Battery Mineral Resources (BM1: to list in April) they remain only part of the portfolio. We continue to observe improved liquidity in other parts of the mining and energy market where we have exposure. Considerable improvements have been seen base metals and uranium. We look forward to updating you on these positions in the future.


Matthew Langsford

Founded in 2010, Terra Capital is an Australian based specialist investment manager for sophisticated, wholesale and institutional clients. Based in Sydney, the firm has established itself as one of the best performing boutique Fund managers in...

Expertise

No areas of expertise

Comments

Please sign in to comment on this wire.