- United States concerns about other countries “stealing” its technologies are at heart of political rift with China
- China processes 80 percent of the world’s cobalt; First Cobalt owns only permitted cobalt refinery in North America
- First Cobalt drilling program in Idaho is exploring promising mineral strike for important tech-friendly metal
The United States’ efforts to prevent foreign investors from “stealing” U.S. technology and intellectual properties could bolster the prospects of domestic mineral exploration companies such as First Cobalt Corp. (TSX.V: FCC) (OTCQX: FTSSF) (ASX: FCC). First Cobalt has been focusing its recent exploration efforts on a mineralized strike in Idaho’s prolific Cobalt Belt that could have national security implications as well as an impact on the production of in-demand modern tech items ranging from smartphones to electric vehicles.
Discovering and developing North American cobalt supply sources has already been a priority among some mining companies, as concerns over changing tax laws and the human rights violations reported in the Democratic Republic of the Congo — the world’s largest producer of the metal on an incomparable scale (http://nnw.fm/Jm0aJ) — have spawned efforts to create a conflict-free supply chain. The United States government’s concerns about losing significant entrepreneurial innovations to foreign investors as they seek to boost their own competitiveness is adding fuel to the fire.
“We have the greatest technology in the world. People copy it and they steal it, but we have the great scientists, we have the great brains, and we have to protect that, and we’re going to protect it,” President Donald Trump said in a June 26 meeting of the Committee on Foreign Investment in the United States (CFIUS) (http://nnw.fm/wY95q). “We have to protect these companies. We can’t let people steal that technology.”
The government had considered declaring China’s investment in U.S. companies involved in technologies, such as new-energy vehicles, robotics and aerospace, a threat to economic and national security (http://nnw.fm/N5ySZ), but it ultimately announced on June 27 that it would forgo such a portentous declaration in favor of strengthening the mandate of the CFIUS to investigate the potential of foreign investments and acquisitions of U.S. companies and to block them if they are considered contrary to national interests (http://nnw.fm/sXI8k). On a parallel course, the U.S. Treasury Department recently unveiled restrictions that specifically target Chinese investors as a result of its investigation earlier this year into the country’s intellectual property practices where “industrially significant technology” is concerned (http://nnw.fm/Y0nPJ). The investment concerns are part of a larger diplomatic battle over U.S.-China trade issues that have led to tariffs on $34 billion worth of Chinese goods that will take effect on July 6, with an additional $16 billion in tariffs anticipated later (http://nnw.fm/14cTf).
China plays a significant role in the cobalt market as well; its refineries process 80 percent of the world’s supply (http://nnw.fm/K0afG). Continued escalation in trade war politics between the U.S. and China has the potential to impact a variety of market sectors, including this precious metal’s.
First Cobalt’s development has proven prescient in this regard as well, however. In addition to the Idaho strike, the mineral exploration company owns 50 historic mining operation sites situated on nearly 25,000 acres in Canada’s famed Cobalt Camp of Ontario, as well as a nearby mill and the only permitted cobalt extraction refinery in North America — currently shuttered, but capable of production of battery-grade material as First Cobalt deems proper. Its Idaho site has the potential to produce a mineral supply that would not have to be imported amid a tariff war. The company is working to bring a historic estimate of 1.3 million tons grading 0.59 percent cobalt and 0.3 percent copper up to modern NI 43-101 reporting standards (http://nnw.fm/pn2OU), however recent drill results indicate potential to expand beyond this historic estimate (http://nnw.fm/Hw8sP).
Cobalt’s role in modern high-tech-friendly batteries is its current cachet. It is one of the critical and hard-to-find metals used in the low-heat batteries that modern computer-reliant technology prefers. Smartphones, with their cobalt-needy lithium-ion batteries, have become a practical necessity across the planet, but they only use about eight grams of refined cobalt. Electric vehicles, which are gaining a state-sponsored respect as nations seek ways to reduce the pollution produced by fossil fuel-powered automobile emissions, have batteries that use more than 1,000 times that of the cell phones. Cobalt also enjoys a national security status because of its use in some military resources, such as rocket and jet engines.
Regardless of the political developments between the United States and China, First Cobalt’s exploration efforts appear to be positioning it to take advantage of whatever the rare metals market may bring in the months ahead.
For more information, visit the company’s website at http://nnw.fm/FTSSF
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