Alberto MigliucciCEO & Founder, Petra Commodities

To what extent does Cobalt represent the greatest value for battery metal investments?

In the 1950’s self-made millionaire Ferruccio Lamborghini made his fortune by building tractors in Italy and then set out to build a more powerful, lighter weight, quieter, V12 powered car than anything available from the likes of Ferrari.

The use of new materials enabled Lamborghini to create his first Superleggera made from lightweight aluminium in the 1960s.

Almost all cars globally were and still are made from virgin steel.

Hot Commodities - Materials driving technology

Petra Commodities 2017

Petra Commodities 2017

Forbes Indonesia May 2015

The “Lithium Ion” Age.

Current industry opinion anticipates that up to 40% of vehicles sold in 2040 will be electric, from a base of less than 1% of global sales

today.

2017 the Future is Electric

Lithium-ion batteries were first commercially introduced by Sony in 1991.

In the past decade, the acceptance of rechargeable batteries (mostly lithium-ion batteries) has been essential to modern technology, powering smartphones, laptops, tablets, medical devices and power tools.

“New Energy Metals” – Lithium & Cobalt have become the DNA of disruption

i) driven by the global push to reduce carbon emissions:

ii) increase dependence on renewables

iii) and break away from traditional infrastructure networks.

Charging The Future in numbers

While lithium grabs the headlines because of its use in batteries, it is just one of the minerals being used, and in fact, isn’teven the most common element in most lithium-ion batteries. Depending on the battery type, the strategic mined metals include cobalt, graphite, nickel, zinc, copper, manganese and aluminium, and these will likely become increasingly important raw materials in the new energy economy

“…One commodity that is looking as good as gold is lithium, the lightest metal on earth and referred to as “white petroleum,” is an essential component of modern batteries, which are expected to enjoy boom years ahead as electric cars become more commonplace…”

Alberto MigliucciPetra Commodities CEO

FORBES Indonesia June 2016

“In order to produce half a million cars a year…we would basically need to absorb the entire world’s lithium-ion production.”

Elon Musk Tesla CEO

Lithium

Forbes Indonesia June 2016

Problem is, there isn’t a traded market for lithium, unlike gold, or other key metals or commodities. Lithium doesn’t have a spot market and isn’t freely traded on an exchange.

Prices are negotiated individually through contracts between buyers and sellers, and there are numerous grades of the metal as well, making it extremely hard to get direct exposure to its positive story.

Lithium

Hard to get direct exposure to its positive story?

• The metal Lithium, the lightest metal on earth but it is a heavyweight in the rechargeable battery sector.

• While worldwide lithium production is dominated by only four major lithium producers, there are currently over 50 junior exploration companies either seeking an economic lithium

So far the main way to play lithium has been to look for the next big play, with junior miners enjoying spectacular gains just by mentioning lithium tenements in press releases.

Hard to get direct exposure to Lithium’s positive story?

Lithium story “spike”

The piece below came out on Friday, and was picked up by ST on Monday 27 March. On that day Alliance was a top 7 stock and traded S$37m. This is 40x more value traded than Tawana. Alliance share price is up 187% since the 18 Jan ’17 announcement on commencement of feasibility study, which is a fundamental change. Tawana is up 45%.

So far the main way to play lithium has been to look for the next big play, with junior miners enjoying spectacular gains just by mentioning lithium tenements in press releases

“…If you look at the constituents of the new energy Lithium-ion battery, we believe Cobalt is a stand out, most the advanced batteries are cobalt-based. with the battery market expected to grow 6X by 2025.

Cobalt is a important share of this Market and demand for the metal is expected to grow at an average annual rate of 5-5.5% over the next 5 years.…”

Alberto MigliucciCEO Petra Commodities FORBES Indonesia December 2016

COAL & MINERALS ASIA Feb, 2017

Cobalt

Forbes Indonesia December 2016

Source: Visual Capitalist, Petra Commodities

Cobalt

In U.S the metal is on critical list seen as essential to its economic health and national defence, the U.S. The U.S. Geological Survey recommended to add the cobalt compounds to the National Defense Stockpile

The U.S. currently consumes approximately 13% of the world’s cobalt supply, with this projected to grow to 15% by 2020.

Cobalt

Concentration Risk Greater than 55% world’s cobalt supply from the

Democratic Republic of Congo (DRC). DRC possesses 60% of the world’s cobalt reserves

and resources. There is a clear supply uncertainty hanging over the

global cobalt market given the treacherous environment of the DRC

Congo’s central bank reported “Production of cobalt, slipped 0.8% to 21,493 tonnes in the third quarter and is down 9% [in 2016].”

Supply Conundrum

Source: Visual Capitalist

Cobalt

Philippines - cobalt-bearing nickel mines are shut-in for environmental/political reasons

96% comes as a by-product of copper or nickel mining

Given these genuine concerns over future supply, end users are looking at alternate supplies and pressure is mounting on companies such as Apple, Samsung and Tesla to find sustainable and ethical sources of cobalt for their batteries

Supply Conundrum

Cobalt

Australia and Indonesia - potential good source for cobalt-bearing nickel mines

Petra Commodities 2017

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Petra Commodities sees strong tailwinds for EV penetration, with Asia being at the heart of the EV charge with Japan speeding ahead of the rest of the world, now boasting more electric car charging stops than petrol stations, a result of the Japanese government subsidies for electric, hybrid and other low-emission cars.

The Energy Future

• The race towards EV superiority is not only an industrial battle

fought by the major automakers. It is also increasingly a strategic

issue for some of the world’s largest economies.

• Europe, the US, Japan and China will all compete to ensure their

auto industries remain relevant into the next decade either to

boost growth or protect jobs. Raw materials in batteries and

infrastructure offer a path to investing in the trend.Petra Commodities 2017

Rechargeable batteries containing a number of mined materials (depending on the type) including cobalt, lithium,

nickel, graphite, zinc, manganese, aluminium and phosphorus will shine brightly as they continue to form part of

the energy future.

The Energy Future

The Energy Future

Former CS Banker launches investment firm

Alberto Migliucci, former head of energy, oil and gas mining in Asia at Credit Suisse, has set-up a boutique capital

and advisory firm with a focus on natural resources deals in Asia.

Petra Commodities opened on August 29, with offices in Jakarta, Singapore and Sydney. Its staff include Asian

based ex-senior banker, Marcel Kreis, former head and chairman of Asia Pacific private banking for Credit Suisse.

Source: AsiaMoney Plus, September 4, 2013

Ian Telfer – Chairman Goldcorp

John Mulligan – World Gold Council

Forbes Indonesia May 2015

Coal & Minerals Asia 2013

Thank You –

Panel Discussion Friday 7th April

09:50

What Does The Growing Demand for Energy Storage Mean for Battery Metals?

About PETRA COMMODITIES

Petra Commodities is “an investment banker’s & geologist’s perspective to Asian resources”

Petra Commodities is dedicated to sourcing, investing in and executing the best natural resources & private deals in Asia, through its established network of corporate and ultra-high net worth individuals.

Petra Commodities was founded by Alberto Migliucci, senior investment banker and geologist with more than 25 years experience including at Credit Suisse’s Managing Director Global Energy Group/ Head of Mining & Metals, Oil & Gas in Asia, where he led the firm to the number one position in the sector’s advisory league tables in Asia. He was also former Head of Energy & Mining – Asia Pacific for Standard Bank, and worked for other banks like Societe Generale (France) and Sumitomo Bank of Japan. Over his career Alberto has closed more than USD100billion of deals.

Petra Commodities structures and executes its chosen transactions and invests its own capital alongside its clients’ to optimize returns for all investors.

Petra Commodities is able to provide a full suite of investment advisory and banking services across the life cycle of natural resource projects, including, M&A, project finance, debt and equity capital structuring and sourcing and principal capital investment. Petra Commodities is currently engaged on strategic advisory and capital solutions for energy and mining projects in Asia and Australia.

For more information please contact

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11/4/2017