The Elon Musk-led electric-car maker burst onto the scene in February with plans to build the $5-billion facility, and has kept the news coming ever since. It announced the location of the gigafactory — Nevada — in September, and at the end of November, analyst Simon Moores of Benchmark Mineral Intelligence revealed that construction is running ahead of schedule.
Cobalt market participants have good reason to be excited. As a number of companies emphasized shortly after the gigafactory's announcement, that's largely because once it's operating Tesla will require a steady, stable supply of graphite, lithium and cobalt — and more importantly it will require a lot of those materials.
Just how much is up for debate. Tesla itself has not made a statement, but Moores estimated earlier this year that the gigafactory could push cobalt demand from the battery sector up by as much as 17 percent from the 2013 level. That's fairly substantial, but the implications become even greater when Tesla's mandate to source its material from North America is taken into account — the US Geological Survey pegs Canada's 2013 cobalt production at 8,000 tonnes and the United States' at just 6,500 tonnes.
And of course, it's not just Tesla that has an interest in electric-vehicle (EV) technology. Responding to a survey, Robin Goad, president and CEO of Fortune Minerals (TSX:FT), whose assets include the NICO gold-cobalt-bismuth-copper project in the Northwest Territories, reminded Cobalt Investing News that LG Chem (KRX:051910) and Foxconn Technology (TPE:2354) are also constructing "battery super plants targeting the EV market."
Clearly Deutsche Bank's (NYSE:DB) recent statement that EVs "will not be niche" is an accurate summary of what's in store.What about that export ban? Tesla's gigafactory announcement was certainly a cobalt market highlight in 2014, but that's not to say nothing else happened. In fact, about this time last year news of a much different sort was making headlines.