Demand for cobalt is increasing at a rapid rate, rising 13.5% each year from 2010–2017. And this number is only expected to keep growing.
Cobalt is a major component in lithium-ion batteries, the same batteries found in most electric cars and other electronic devices.
The spot price of Cobalt traded at US$54,500.00 per tonne on 3 October.
Electric Cars fuelling cobalt demand
By 2027 cobalt demand is expected to grow by more than 14.5%, this can be put down to an upturn in the lithium-ion-battery sector due to the increasing adoption of electric and hybrid cars that are hitting shores everywhere.
A report by Roskill information services indicated that the battery market has accounted for around 53% of the total cobalt consumption.
Roskill also had this to say:
‘Thereafter, a combination of further expansions from existing miners, new projects, and perhaps the re-start of some operations on care and maintenance will be required if supply is to meet demand. With the vast majority of cobalt mined as a by-product of copper and nickel mining, future mine supply is complicated by the fact that cobalt output is principally governed by demand for, and subsequent supply of, copper and nickel’.
As auto makers look to produce greener and cleaner cars we have seen a collective rise in many cobalt shares, such as Clean TeQ Holdings Ltd [ASX:CLQ] the owner of one of Australia’s largest cobalt deposits, which has almost tripped this year. Smaller stocks like Cobalt Blue Holdings Ltd [ASX:COB], Australian Mines Ltd [ASX:AUZ], Artemis Resources Ltd [ASX:ARV] and Aeon Metals Ltd [ASX:AML] have also seen an increase in trading.
At the time of writing, these stocks were trading at:
- Clean TeQ at $0.58, up 1.75%.
- Australian mines at $0.045, up 2.27%.
- Artemis Resources at 0.18
- Aeon Metals Ltd at 0.36
Is a Cobalt comeback near?
Australia has the second biggest cobalt reserves in the world.
There’s been a lot of developments made on all fronts of the Cobalt sector this year and this could be very important for investors.
On Friday, Aeon’s Queensland project raised $30 million from institutional investors.
Meanwhile, Australian Mines have 10 battery making firms in discussion, according to Managing Director Benjamin Bell. Their Sconi project is also underway with firms from Germany, Japan, China and South Korea to cement its take off. Sconi is set to produce 2,500 tonnes of cobalt after production begins in late 2019.
Things aren’t looking too bad for Australia’s cobalt sector, as a rush of interest in projects still years from fruition are seemly more appealing than the cheaper, riskier source from the Democratic Republic of Congo — the world’s biggest producer.
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