Cobalt explorer Red Mountain Mining gets to work in the Congo as electric cars drive demand
Cobalt and copper explorer Red Mountain Mining has started work on a newly acquired project that lies 120 km from one of the world’s top three copper mines.
Perth-based Red Mountain (ASX:RMX) recently agreed to acquire 90 per cent of a copper-cobalt project in the Democratic Republic of Congo (DRC) called Mokabe-Kasari.
The 116 sq km site lies in the Congolese copper belt, about 120 km from Ivanhoe’s Kamoa-Kakula project, which is thought to be among the top three copper resources in the world at more than a billion tonnes.
“The remarkable consistency of the ultra-high-grade copper mineralisation at the Kakula Discovery is unlike anything geologists have ever seen in the DRC’s Copperbelt,” Ivanhoe’s chairman Robert Friedland said this week.
“The discovery remains open in virtually all directions, so the real question is: how much bigger and better is Kakula going to get?”.
Mokabe-Kasari is also about 70 km north of another of the world’s biggest cobalt and copper mines, Tenke Fungurume.
In geological terms the DRC copper belt is “Hollywood”, says Red Mountain director Jeremy King.
“That DRC copper belt is the pre-eminent cobalt jurisdiction in the world – it has outstanding copper mines and outstanding cobalt mines,” Mr King told Stockhead.
In recent times about a dozen small (or “artisanal”) miners have worked the Mokabe-Kasari site – but Red Mountain will be the first explorer to mount a major exploration effort with modern equipment.
Initial work by Red Mountain’s technical lead, CSA Global, has so far revealed high-quality cobalt grades of 0.3 to 0.4 per cent.
Cobalt grades above 0.1 per cent are considered economic; grades above 0.2 are average and grades of 0.3 and above are considered very good, especially with scale.
Cobalt operations in Australia typically show grades of 0.1 and 0.2 per cent.
“We’ve got a good deal and now we’ll take a systematic approach,” Mr King said.
Demand for Cobalt is expected to increase eight-fold between now and 2025 due to its use in electric car batteries.
“The cobalt price is at historical highs and we only see that strength continuing.”
Up to a billion electric cars are expected to be on the road globally by 2050 as the cost difference between battery-powered and combustion engine cars disappears.
Average global cobalt demand growth of 6.7 per cent a year is expected through to 2025, driven by an 800 per cent lift in cobalt’s use in electric vehicles, Morgan Stanley reported earlier this month.
Some ASX-listed cobalt-related stocks are already benefiting.
Fellow DRC cobalt-copper developer Nzuri Copper (ASX:NZC) has a market cap of $46 million and a share price of 20c.
Namibia-focused cobalt explorer Celsius Resources (ASX:CLA) has climbed from 3c as high as 5c since early July, and is now valued at $20.2 million.
Red Mountain will drill to depths of 15 to 20 metres in the south-west of the site where cobalt mineralisation is present.
“We will take probably 500 samples from about 1000 metres of drilling in total. That will be sufficient to pick up the channels of cobalt we are hoping to locate.”
Geologists will also undertake a traditional soil-sampling program targeting copper mineralisation. This would include about 150 to 200 samples at a depth of up to a metre in three areas.
The samples will then be assessed in the lab.
“The work will begin straight away in preparing for the drilling – getting the equipment and CSA Global team in place from next week,” Mr King said.
“This is a relatively greenfield site. We do know there are artisanal [local, independent] workings taking the oxidised ore at surface — but there has not been a modern scientific drilling project applied to the site.
Red Mountain was also considering other potential projects, Mr King said.
“We want to continue to build our portfolio.”
Red Mountain Mining’s share price jumped 20 per cent to 1.6c on Thursday.
This special report is brought to you by Red Mountain Mining.
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