cobalt

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The Renewables Monthly Metals Index (MMI) rose 2.7% this month, as Toronto-based First Cobalt signed multiple refinery feedstock agreements. (Editor’s note: This report also includes coverage of grain-oriented electrical steel, or GOES.)

January 2021 Renewables MMI chart

First Cobalt signs refinery feedstock agreements

Toronto-based First Cobalt announced Tuesday it has achieved a “key milestone” with new refinery feedstock agreements reached with Glencore AG and IXM SA.

The cobalt hydroxide deals will see First Cobalt receive a total of 4,500 tonnes per year beginning in 2022. The feedstock will come from Glencore’s KCC mine and China Molybdenum Co.’s — parent company of IXM SA — Tenke Fungurume mine.

The agreements represent 90% of projected capacity for the Canadian refinery. Furthermore, the deals will yield “22,250 tonnes per year of battery grade cobalt sulfate,” per the company’s announcement.

“This is a pivotal moment for our North American cobalt refining strategy,” First Cobalt President and CEO Trent Mell said. “Our globally competitive cost structure and industry-leading ESG credentials put us in a strong position for a rapidly growing EV market. With feedstock arrangements in place, we can continue to advance our vision to create a new cobalt supply chain in North America.

“Electric vehicle sales in Europe were up more than 100% in 2020 and the U.S. will be the next large market to take off.”

In other company news, First Cobalt signed a letter of intent with Kuya Silver Corporation to sell “a portion of its silver and cobalt mineral exploration assets in the Canadian Cobalt Camp and form a joint venture to advance the remaining mineral assets.”

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gold price

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The Global Precious Monthly Metals Index (MMI) gained 5.3% for this month’s index value, as the gold price surged to start the year but couldn’t hold onto those gains.

January 2021 Global Precious MMI

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Gold price ups and downs

Amid ongoing economic uncertainty, a falling dollar and the coronavirus pandemic, many market watchers are keenly interested in the fortunes of gold.

While numerous analysts predicted gold could reach $2,500 per ounce last year, that didn’t happen.

The gold price did reach as high as $2,034 per ounce in early August, inspiring speculation with respect to how much further the price had to run.

Gold cooled off in the ensuing weeks before heating up again throughout December and early January. The gold price reached $1,957 per ounce during the first week of January before retracing, dropping to $1,828 per ounce as of Jan. 10.

Meanwhile, the U.S. dollar — which generally correlates inversely with the gold price — hit a two-year low back in August (when gold reached its 2020 peak). From the beginning of November to early January, the dollar lost approximately 5% of its value.

However, the dollar has staged a small rally over the last week. The U.S. dollar index fell to 89.44 as of Jan. 5 before bouncing back to 90.47 on Jan. 11.

So what could drive the price this year?

“Physical demand could pick up in 2021,” MetalMiner’s Stuart Burns wrote last month. “China is forecast for potentially double-digit growth in 2021 with a strong tailwind from this year’s stimulus measures and a robust recovery in consumption.

“India, the other major physical gold market, does not look as positive. The country will likely have a slow vaccine rollout and is facing severe banking risks. That could hamper the Indian economy’s recovery in 2021. In turn, a slower recovery could impact consumer appetite for spending, with unemployment up and some sectors still struggling.”

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