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Why Jervois Global is moving downstream

Kitco News

(Kitco News) - Going downstream gives Jervois Global protection from likely bottlenecks as the battery metal space grows, said the company's CFO James May.

On Monday May was interviewed by Kitco.

Jervois Global (ASX:JRV) is a supplier of nickel and cobalt. It has two refineries it recently acquired, as well as a cobalt project it is advancing in Idaho. In 2020 the company acquired the Sao Miguel Paulista nickel refinery in Brazil for $22.5 million. Last year Jervois acquired the Freeport McMoran's refinery in Kokkola, Finland, for $160 million.

May said the company had a "reset" in the late last decade when ex-Glencore executives joined the company. In 2018 Peter Johnson became Jervois's chair. Johnson was previously CEO Minara and head of global nickel assets at Glencore.

May said Jervois said the benefits that came from adding the refineries. It gives the company better margins and more control of risks. With battery metal demand set to keep rising, constraints are going to develop all through the supply chain. More downstream control allows for more control when bottlenecks invariably occur.

'I am basically exiting the junior resource space. I am very bearish.' - Mickey Fulp

"Bottlenecks are going to move around. Sometimes it'll be in mining. Sometimes it'll be in refining. We see multiple segments. By having multiple ways to play the value chain, it
gives us an opportunity to harvest strong cash flows," said May.

"We see battery materials as fundamentally different. There's real genuine opportunity to capture full margin through the value chain and offer an end-to-end integrated solution to customers demonstrating full traceability of our products through the systems."

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