When asked about the sinking prices, Tom Price, a market analyst with the investment bank Liberum, pointed to various shifts occurring overseas, including multinational mining company Glencor PLC’s decision to close a mine in Congo in 2018 to counter low prices. At the same time, new supply from Congo and Indonesia were coming online, all of which flooded the market and further depressed prices, said Crocker. Last fall, the company said the mine would open and be fully commissioned this year, making it the only active cobalt mine in the nation aside from the Eagle mine in Michigan, which produces a small amount of cobalt as byproduct and is slated to close in 2026.Ĭrocker said a slowdown of the Chinese EV market amid lockdowns during the pandemic led to an oversupply of the cobalt market. Jervois originally decided to invest in its Idaho cobalt mine based on a feasibility study that assumed cobalt prices would climb to $25 per pound, said Crocker. “Is cobalt just not that cool anymore and that’s why it happened?” ‘Particularly painful’ Cobalt mine infrastructure is shown in the Salmon River Mountains. “It’s unclear how important cobalt will be going forward,” said Lange. Lange questioned whether Jervois, as a small company, was unable to ride out price fluctuations that a larger company may have planned for, and noted the EV sector is increasingly turning to lithium-iron-phosphate batteries that don’t contain cobalt. federal policy is geared toward smoothing market fluctuations or encouraging long-term offtake agreements between miners and potential buyers, including EV battery makers. Ian Lange, director of the mineral and energy economics program at the Colorado School of Mines, said nothing in U.S. “It’s a reminder that mining is, even in this day and age, boom or bust and subject to the whims of a global market.” “They have absolutely zero control over the market for something as volatile as cobalt,” Johnson continued. “Despite this flashy industry narrative about climate change … at the end of the day, the mining companies still need to make a profit,” said Josh Johnson, a senior conservation associate for the Idaho Conservation League who forged a partnership with Jervois to watchdog the Idaho mine. mines and whether the EV industry’s pivot away from cobalt - a mineral tied to harsh working conditions and accusations of child labor in Congo - is fueling a price drop that made the Jervois project uneconomical. The Department of Defense has also advised Jervois it intends to award the company $15 million in funding under the Defense Production Act, as long as Jervois successfully complies with terms and conditions of the award, the company said.īut academics and environmentalists questioned just how big a role the government should play in propping up U.S. The company has spent $150 million on the Idaho mine, and is now seeking both loan guarantees through the Energy Department and incentives under last year’s Inflation Reduction Act. Jervois is indeed angling for federal support. Once operational, Crocker said the mine would supply 10 to 15 percent of U.S. The closure of the Jervois mine occurred despite the fact that the silvery-blue battery metal is used in the making of EV batteries and other tech. climate policy, which will need minerals supplied by costly mines for renewable energy technology and, therefore, be vulnerable to quickly shifting markets that determine those mining projects’ viability. The unexpected closure shines a bright light on a tension for U.S. “If wants these industries, domestically, for reasons that are relevant to national security, or for reasons that are relevant to the energy transition, then I think there has to be a realization that leveling the playing field is going to be required,” said Crocker. federal government to provide the right level of support for projects facing stiff competition abroad - sometimes from state-backed firms -as the Biden administration moves to tackle climate change and boost national security. The project’s plight, he said, shows the need for the U.S. Despite having its necessary permits in hand, Crocker said the mine will sit idle in the remote Salmon River Mountains along the state’s historic cobalt belt until the price of the mineral climbs up to $25 per pound.
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