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First Cobalt company downplays Elon Musk's cobalt-free batteries

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(Kitco News) - After trumpeting his vision for dropping cobalt from his batteries, First Cobalt (TSX-V: FCC; OTCQX: FTSSF) said Elon Musk will face a "formidable challenge" ditching the blue metal. 

First Cobalt describes itself as a North American pure-play cobalt company with a dedicated refinery in Ontario, Canada. 

Yesterday Musk announced several technical developments to advance battery technology at Tesla. First Cobalt CEO Trent Mell said cobalt is a crucial component of battery chemistry. 

"Despite years of trying to remove cobalt from batteries, it has proven to be a formidable challenge owing to its importance in keeping batteries safe and extending the life of cells," said Mell in a news release. 

"Battery manufacturers have instead opted to lower the amount of cobalt in a cell to decrease the cost while preserving the integrity of the battery. This is the battery evolution trend almost all market experts are predicting, with the nickel-cobalt-manganese (NCM) cathode remaining the dominant chemistry."

Mell added that most of Tesla's competitors are developing their electrification plans on the basis of NCM battery technologies.

In a research note, BMO said dropping cobalt could reduce costs substantially, calling the change Musk's most important announcement during Battery Day.  

"From a commodities perspective, the most important announcement was the commitment to achieve a high-nickel cathode that will contain zero-cobalt and instead contain 2/3 nickel and 1/3 manganese, possibly with aluminium, which would make it an NMA formulation. While capacity issues seem to occur in all high-nickel formulations, this next generation cathode could lead to a 4% vehicle range increase while reducing costs and investment per GWH by 5% and 16% respectively, although no timeline was given for when this technology will be finalised," BMO Capital Research said in a note published Wednesday.

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