Many investors have been interested in cobalt as a result of these factors. Cobalt futures and cobalt stocks are the two major ways to invest in the metal.
The London Metal Exchange trades cobalt futures under the symbol CO. These futures, which were first traded in early 2010, are priced in US dollars per tonne. Investors can place wagers on the metal for a variety of time periods thanks to the 15-month contracts.
Investing in cobalt-mining companies is another way to gain exposure to the crucial metal. Caspar Rawles, Head of Price Assessment at Benchmark Mineral Intelligence, has advised any investor interested in cobalt to look at copper and nickel businesses who are mining or exploring for the metal “Unless they’re lucky enough to locate a (junior) with a mainly cobalt deposit.”
He continued, “I believe that the key for smaller businesses is to focus on value-added goods further downstream rather than just concentrates like cobalt sulfate, which are aimed at the battery supply chain.”
A number of major firms with cobalt exposure, as well as some smaller companies attempting to get into the market, are included in our list of Canadian cobalt companies that have witnessed year-to-date gains. For individuals who are new to the industry, it is an excellent place to start.
Investors should also have a look at our list of the most valuable cobalt stocks on the ASX.
Is there a cobalt exchange-traded fund?
Although there is no ETF that just invests in cobalt, the VanEck Green Metals ETF (GMET) is a decent pick for cobalt exposure.
What is the best cobalt stock?
To fulfill the increased demand for electric vehicles, cobalt production will need to increase. The following five cobalt equities are already in the lead:
Let’s look at each of these stocks in more detail. You’ll see why they’re among the best cobalt stocks on the market now.
Glencore is an obvious candidate because it is one of the world’s largest cobalt producers. As a result, it’s a fantastic cobalt stock. The global Anglo-Swiss corporation, Glencore will generate 27.4 kt of cobalt in 2020. This is equivalent to 20% of global production. The majority of this output comes from its copper mines in Katanga and Mutanda.
Glencore’s EBITDA for the year was $11.6 billion, and its revenue was $142.34 billion, according to its 2020 annual report. It did, however, lose $1.9 billion in the process. It has 135,000 employees and works in more than 35 countries.
Vale S.A., a global mining firm based in Brazil, is the world’s largest producer of iron ore and nickel. While those are the most important aspects of the company’s operations, it also deals in manganese, copper, kaolin, and, yes, cobalt. Vale produced 4,672 metric tons of cobalt in 2020. It produces cobalt as a by-product of nickel production from mines in Canada’s Sudbury, Thompson, and Voisey’s Bay, as well as elsewhere.
Vale is also one of Latin America’s most valuable enterprises. In 2020, the company’s revenue will exceed $40 billion, with a net income of about $5 billion. Cobalt accounts for barely 1% of Vale’s revenue at the moment, but that might change if global cobalt demand grows.
Wheaton Precious Metals
Vancouver, British Columbia, Canada Another non-direct cobalt stock is Wheaton Precious Metals. It is a gold and silver specialist. It produced 357,300 ounces of gold and 30.4 million ounces of silver in 2016.
Wheaton just purchased cobalt production from Vale, despite the fact that it hasn’t produced much in the past. As a result, it will own 42.4 percent of the cobalt produced at the Canadian Voisey’s Bay mine. This will continue until 31 million pounds of cobalt are produced, after which it will receive 21.2 percent of production.
Wheaton’s revenue in 2020 was $248 million, with a $105.8 million net profit. It currently has 14 “streams” that enable it to create a variety of metals. It also has 24 mines in operation and eight development projects in the works.
China Molybdenum Co.
China Molybdenum (CMOC) is the major producer of molybdenum in Mainland China, as its name suggests. Despite this, it is one of the top five producers of molybdenum in the world. Meanwhile, it is the world’s second-largest cobalt producer. As a result, it is one of the best cobalt stocks available. It is also the largest copper producer on the planet.
Cobalt is a major bet for CMOC. When it was part of an agreement that permitted it to claim 80 percent of the Tenke Fungurume Mine’s production, it was already the dominant owner. The company then unveiled a $2.51 billion plan in 2021 to increase the mine’s copper and cobalt production. This mine is located in the Democratic Republic of the Congo (DRC), the world’s largest cobalt producer.
Its sales was 113 billion in 2020, and its net income was more than 2 billion. Its headquarters are in Luoyang, China, and as of 2020, it employed about 11,000 people.
Carpenter Technology Corporation
Carpenter Technology is another well-known cobalt company. It develops, manufactures, and sells stainless steels and corrosion-resistant alloys from its headquarters in Philadelphia, Pennsylvania. Titanium, nickel-copper, and nickel-cobalt are among the company’s other goods.
Carpenter’s primary source of revenue is currently not cobalt. The aerospace and defense industries account for the majority of its revenue. With a market capitalization of roughly $1.5 billion, it’s also a modest corporation. In FY2020, it had a revenue of more than $2 billion. It also has a net worth of nearly $3 billion.
Is there a significant demand for cobalt?
The EV industry has definitely established itself as a significant driver for cobalt, with demand increasing this past year as a result of higher sales in important markets such as Europe. “Electric vehicles will continue to be the key driving force of the cobalt market in 2022,” Fisher said.
As previously stated, as the use of LFP cathodes grew in popularity, concerns among cobalt investors grew, with many guessing on how much this would affect the cobalt market.
“I don’t think investors should be too concerned,” Miller added, “since we see absolute cobalt demand increasing over the demand cycle.” “By 2025, we expect structural deficits in the cobalt market, necessitating the development of new technologies to address these supply shortages.”
Both NCM and LFP chemistries continue to dominate the battery market for EV applications, according to CRU.
“LFP has gained market share in China through 2021 as a result of the popularity of mini EV models like the Hongguang mini,” Fisher said, “but NCM will maintain market share for longer-range, larger, and higher-performance vehicles.” “We expect cobalt demand to stay strong as a result of this, despite LFP’s recent performance.”
What is the best place to trade cobalt futures?
DR Congo is by far the largest cobalt production (more than 50%), followed by Russia, Australia, the Philippines, and Cuba. The London Metal Exchange offers cobalt futures for trade (LME). The usual contact is 1 tonne in size.
What is Tesla’s source of cobalt?
The final pilot, which will cover the whole Tesla supply chain, is scheduled for the fourth quarter. The final industry solution will be released in 2022, with cooperation from Kryha, a boutique blockchain technology studio.
Tesla agreed to acquire cobalt from Glencore’s Congo mines in 2020, but the company has been working to lessen its reliance on the commodity.
The Democratic Republic of Congo (DRC) possesses over 70% of the world’s cobalt reserves, which are critical for lithium-ion batteries used in the fast-growing EV sector.
After Congo’s industrial mines, artisanal miners are the world’s second-largest source of cobalt. CRU estimates that the DRC will generate more than 100,000 tonnes of cobalt this year, accounting for 71% of global production, with 8,000 tonnes coming from artisanal sources.
Many moves to formalize the business are motivated by child labor and a lack of safety precautions in artisanal mining.
Children as young as seven have been spotted scavenging for cobalt-bearing rocks in the DRC, according to Amnesty International. The group also claims to have proof that the cobalt mined by the miners has made its way into the supply lines of some of the world’s most well-known companies.
Who is the largest cobalt miner in Australia?
There are 68 cobalt-focused projects around Australia, according to Australia’s 2020 list of important minerals projects.
The largest is Glencore’s (LSE:GLEN,OTC Pink:GLCNF) Murrin Murrin nickel-cobalt mine, which began production in 1998 and is located in Western Australia’s Northeast Goldfields region. The mine generates 66.7 percent of all cobalt in the country. Unlike many other mines that saw a drop in cobalt production during the pandemic, Murrin Murrin saw a 14 percent increase in production year over year in 2020.
Murrin Murrin extracts its resources by traditional open-pit mining and processes and refines cobalt ore on site. The mine produced around 30,100 tonnes of nickel and 2,500 tonnes of cobalt by-product in 2021.
Glencore produced roughly 31,300 tonnes of cobalt in total in 2021 across all of its activities, including those in the DRC. The company processes and recycles cobalt-containing products in addition to producing them.
Broken Hill, a new mining venture owned by Cobalt Blue Holdings, is another important cobalt project in the country (ASX:COB,OTC Pink:CBBHF). This project is notable for its focus on cobalt production rather than being extracted as a by-product of nickel extraction, cobalt will be manufactured on-site.
Over the course of a 20-year mine life, the Broken Hill project is expected to produce roughly 4,000 tonnes of cobalt each year. The cobalt production process at Broken Hill will involve concentration, leaching, calcining, and project recovery, with an annual sulphur output of 300,000 tonnes expected, boosting the project’s value.
Broken Hill will also process its cobalt, which is a nice change from transporting the raw material to another country for refinement, most commonly China. This method will eliminate unethical labor practices throughout the manufacturing process.
Panoramic Resources (ASX:PAN,OTC Pink:PANRF), Australian Mines (ASX:AUZ,OTCQB:AMSLF), and Clean TeQ Holdings are only a few of the biggest cobalt producers with active locations in Australia (ASX:CNQ). These companies are all top nickel producers with a lot of cobalt as a by-product.