ASX investors gave the shares of fallen cobalt idol Jervois Global another pasting on Thursday as they assessed the fallout from the shock decision to halt construction work on its flagship Idaho Cobalt Operations (ICO) in the US.
After slumping more than 40% on Wednesday and a near matching 38% on the Toronto Exchange later that day, Jervois shares lost another heavily on the ASX for a second day.
So far as the ASX investment sector is concerned, the shock update has dethroned Jervois from its position as a potential world leader in cobalt to an also-ran.
Jervois had plans to expand deeper into cobalt mining and processing in the US and on the world stage (as global major Glencore battles a big Chinese rival in central Africa).
But the slide in renewable metal prices, led by lithium, nickel and especially cobalt in the past couple of months has seen Jervois’ ambitions come unstuck.
Jervois shares closed at 6.7 Australian cents on Wednesday on the ASX and 7 Canadian cents on Toronto Exchange. On Thursday the ASX listed shares ended at 5.9 cents, down nearly 12% after falling more than 19% early in the session
Jervois says it is still bullish for the metal – in the medium term as it expected prices for the battery metal would recover because of rising demand from electric vehicles (EVs) makers, energy transition initiatives and demand from Western countries transitioning to a carbon-less future.
Jervois said it intends finishing construction of the full concentrator at ICO once cobalt prices recover, which it also expects will align with refining capacity in the US brought into operation by the company and/or third parties.
Cobalt is a crucial component in EV batteries and is on the US government’s critical minerals list.
Last week, the US and Canada struck a deal that will see companies with critical minerals projects from both countries be eligible this spring for financial aid from a $US250 million fund.
This week, Japan and the US reached agreement on electric vehicle battery minerals that will strengthen battery supply chains and granting Japanese automakers wider access to the new $US7,500 US electric vehicle credit contained in the Inflation Reduction Act of 2022 and the $US369 billion in assistance to green and renewable businesses and products such as solar panels and EVs.
Jervois has applied for funding from the US Department of Defence to accelerate drilling to increase the mineral resource and reserves at ICO, and to assess the construction of a US cobalt refinery.
Jervois told investors that both will proceed despite the suspension of construction at ICO, said to be the largest cobalt resource in the US.
The project was partially built when Jervois bought it in July 2019, with more than $120 million invested by the previous owners.
The operation would entail a 1,200 tonne a day mill and concentrator to produce separated cobalt and copper concentrates, with a gold by-product.
Jervois owns a nickel and cobalt refinery in Brazil and is talking to third parties in countries such as Canada and Australia to convert the mined material.
