Aug 11, 2022 14:44
This precious metal has great development potential because cobalt is an integral element of many emerging technologies. Cobalt is a significant resource nowadays since it is an essential component of metal alloys and lithium-ion batteries. And with the rise of electric vehicles, cobalt may be an asset worth investing in, if not directly, then through the finest cobalt mine stocks.
Cobalt is an element with the chemical formula Co and atomic number 27. Like nickel, cobalt is exclusively found in the Earth's crust in chemically mixed form, except for tiny amounts found in meteoric iron alloys. Produced by reductive smelting, the free element is a hard, glossy, silver-gray metal. Cobalt is an industrial element used as a basic material. This element, which is often a byproduct of processing copper or nickel, is utilized in products such as electric car batteries, industrial equipment components, and paints.
During the COVID-19 epidemic, cobalt prices have gradually risen, mostly because of the increased demand for lithium-ion batteries in electronic gadgets and electric vehicles. Consider investing in cobalt stocks if you want to bet on the rising usage of battery technology and renewable energy.
As stated previously, cobalt is in high demand due to its application in lithium-ion batteries, and electric cars utilize these batteries. Nevertheless, other metals exist, so what makes cobalt unique?
It is unique because it aids in boosting the energy density of battery packs. This is critical for electric cars since batteries with insufficient energy density are too hefty to be used in consumer automobiles.
Batteries have long struggled with insufficient energy density. Gasoline is approximately 100 times more energy dense than a conventional lithium-ion battery. Therefore, increasing the energy density of batteries is essential, and EVs are more energy-efficient than gasoline-powered vehicles. Manufacturers must still compensate for the decreasing energy density of batteries.
Keep in mind that while cobalt output is anticipated to increase, this is not a given. And this may represent a threat to cobalt mining stocks. As indicated above, the DRC is the world's greatest cobalt producer. This has prompted some to question the possible violation of human rights associated with cobalt mining. Cobalt is a poisonous metal, which further complicates matters.
Researchers are attempting not just to increase the energy density of Li-ion batteries but also to minimize or eliminate cobalt. For example, a team of researchers from the University of Texas presented the test findings of a novel, cobalt-free cathode chemistry.
The experiment utilized a nickel-rich cathode and a lithium-ion pouch cell. Energy density was somewhat decreased, while charge times remained the same. Importantly, the battery's life lasted far beyond 1,000 charge cycles, which is another common use for cobalt.
Other potential developments include cobalt-free solid-state batteries. Despite the fact that this is all preliminary research, it has the potential to alter the production of lithium-ion batteries.
Investing in cobalt stocks makes a great deal of sense as both a long-term investment and a hedge against inflation, given the increasing popularity of electric cars and the expanding need for cobalt in a variety of industrial applications.
Cobalt is utilized in cutting-edge technologies that are anticipated to grow quickly in the near future. This trend indicates that a patient investor's investment in cobalt equities from large mine operators to companies in the mine development phase might offer huge returns over time.
The BHP Group is an Australian conglomerate that operates mines and other facilities all over the world. The company is in the business of mining for metals, raw materials, and power. BHP's major products are copper and nickel. Hence, the company naturally mins cobalt (a byproduct of processing these two metals).
In 2021, BHP entered into a relationship with the AI computing startup KoBold Metals, which employs algorithms to make the land acquisition and exploration choices. Battery components for electric vehicles and other renewable energy projects require metals like cobalt and nickel, which BHP hopes to get through this agreement.
BHP Group is consistently successful, with operating profit margins in the double digits despite the cyclical nature of the mining industry.
Cobalt Blue Holdings is an Australian cobalt mining business headquartered in New South Wales, and its shares are publicly traded on the Australian stock exchange. Cobalt Blue touts itself as a provider of "green energy technologies."
Currently, the company is concentrating on creating lithium-ion battery technology for electric vehicles. Currently, Cobalt Blue controls the whole Broken Hill Mining Project, located just outside Adelaide.
This mining facility would extract cobalt from three deposits. It has the capacity to produce 79,500 metric tons of cobalt. Cobalt Blue is smaller than the majority of the businesses on this list. However, the business may be able to create a cobalt presence in Australia.
It also offers the benefit of not being dependent on DRC mining. Since August, Cobalt Blue stock has been on an upward track and recently surpassed its all-time high share price in April of last year, although it is still a penny stock.
This might be a fantastic alternative for those seeking an inexpensive cobalt stock and who are ready to take on more risk with a more volatile investment.
Glencore plc (OTC: GLNCY) is the world's largest producer of cobalt, as its mines in Australia, Canada, DRC, and Norway produced 25,320 metric tons annually in 2021. This represents 16 percent of global output. The company, situated in Baar, Switzerland, anticipates increased production as a byproduct of the Katanga and Mutanda copper mines. Glencore plc (OTC: GLNCY) is contemplating extending its activities in the nickel supply chain through partnerships with Electra Battery Materials, Talon Metals, and the Ontario government. Glencore plc (OTC: GLNCY) is investigating the viability of developing a nickel sulfate battery materials factory in close proximity to Electra's cobalt refinery and recycling plant.
In addition, Glencore plc (OTC: GLNCY) announced in May 2022 a new arrangement with Li-Cycle Holdings Corp. (NYSE: LICY). The strategic alliance would make Li-Cycle the company's chosen recycling partner for lithium-ion batteries. Glencore plc (OTC: GLNCY) is anticipated to subscribe to a $200 million convertible debenture in Li-Cycle. The company will own a 10 percent share in Li-Cycle Holdings Corporation (NYSE: LICY) if the option is exercised.
Third Point LLC of Dan Loeb initiated a position in Glencore plc in Q1 2022. (OTC: GLNCY). In addition, General Motors Company (NYSE: GM) struck an agreement in April 2022 to purchase cobalt from Glencore plc (OTC: GLNCY) for use in its electric vehicles.
In 2021, Zhejiang Huayou Cobalt of China produced an anticipated 5,390 MT of cobalt. Research, development, and production of new energy lithium battery materials and cobalt new material products; deep processing of cobalt and nickel new material products; and mining, selection, and primary processing of non-ferrous metals including cobalt, nickel, and copper.
Zhejiang Huayou Cobalt has collaborated with electric vehicle battery manufacturer EVE Energy (SZSE:300014) and others to construct a nickel and cobalt smelting complex in Indonesia, costing $2.08 billion.
As the demand for metals in electric vehicle batteries grows, Jervois Global is one of the greatest cobalt companies to invest in and a highly interesting nickel play. With the 2021 purchase of Freeport-(NYSE: FCX) McMoRan's cobalt-refining and recycling assets, Freeport Cobalt Oy, Jervois has the potential to become the world's second-largest producer of refined cobalt outside of China.
The JRVMF stock price grew approximately 55% thus far in 2018.
The company made $296,000,000 in 2021 from the sale of over 5,700 metric tons of cobalt. The fourth quarter of 2012 saw a dramatic spike in the price of cobalt, which led to a 26% sequential increase in the company's quarterly revenue. The company's management team is optimistic about 2022's prospects for revenue growth.
The Idaho cobalt-copper development mine that Jervois owns is scheduled to begin production in the middle of the year 2022. The company also has plans to revive Latin America's one and only nickel-cobalt refinery in Sao Miguel Paulista, Brazil.
Wheaton Precious Metals Corp. (NYSE: WPM) is a Canadian metals streaming corporation with agreements with 23 operational and 13 developing mines.
In a letter to investors dated April 21, Matthew Murphy from Barclays maintained an Equal Weight rating on Wheaton Precious Metals Corp. (NYSE: WPM) stock while increasing the price objective from $45 to $49.
The firm announced sales of $305 million and operating cash flow of $210 million during the first quarter of 2022 on May 5. As of March 31, Wheaton Precious Metals Corporation's (NYSE: WPM) net cash balance was $376 million. According to CEO Randy Smallwood, the firm had a solid start to the year with the acquisition of two additional streams and the adoption of a climate change strategy to achieve the goal of zero carbon emissions by 2050. In addition, Wheaton Precious Metals Corp. (NYSE: WPM) issued a cash dividend of $0.15 for the second quarter of 2022, representing a 7% increase year-over-year. On June 3, the dividend will be distributed.
Twenty-four hedge funds out of the 924 hedge funds tracked by Insider Monkey as of Q4 2021 owned positions in Wheaton Precious Metals Corp. (NYSE: WPM) worth a total of $490,7 million. First Eagle Investment Management, managed by Jean-Marie Eveillard, is the largest hedge fund investor in Wheaton Precious Metals Corp. (NYSE: WPM).
Other significant cobalt stocks on the list are Carpenter Technology Corporation (NYSE: CRS), Umicore SA (OTC: UMICY), and Sherritt International Corp. (SG: HRT).
In 2022, when it begins nickel, copper, and cobalt production at its Savannah project in Western Australia, Australia-based Panoramic Resources might be a speculative stock to purchase for its cobalt upside.
Rising nickel and cobalt prices as a result of electric vehicle battery production-induced demand could increase the net present value of Panoramic Resources' project in 2022 and beyond, while an offtake agreement with commodities trading giant Trafigura ensures a strong financial partner and dependable customer.
In February, the second shipment of nickel-copper-cobalt concentrate to China was reported. The company's Savannah asset has just recently begun to generate money. The cargo of 9,400 tonnes has a potential value of $14.6 million.
However, cobalt remains a relatively minor component of mine reserves at now. The Savannah resource estimate consists of 13,700 metal tonnes of cobalt, 209,800 metal tonnes of nickel, and 94,200 metal tonnes of copper.
Nonetheless, the investigation is ongoing, and further likely resources may be discovered. This year, PANRF stock is an EV battery metal stock to actively monitor.
Sherritt International is a nickel producer with mines in Canada, Cuba, and Madagascar that has an unrelenting emphasis on minimizing expenses. Cobalt comprises a greater share of Sherritt's portfolio than other companies: metal sales increased 24% to over $160 million last year, accounting for about one-third of the company's $498 million annual revenue.
The company provides investors with a unique option. Its major cobalt business is a joint venture over the nickel and cobalt-producing Moa mine in Cuba. Due to the hostilities between Cuba and the United States, Sherritt must work around their incapacity to conduct business. The company combines nickel and cobalt into sulfides and transfers them to its refining facilities in Fort Saskatchewan, Canada, from whence they may be processed and sold freely to other markets. It sells predominantly in Europe, Japan, and China.
Moa met the lowest end of its projection range in 2018 by producing 3,234 tonnes of cobalt on a 100 percent basis, and in 2019 it anticipates an increase to between 3,300 and 3,600 tonnes. The improvement will be the result of expenditures made on new equipment and a shorter haulage route last year. Its Canadian refinery has the potential to process up to 3,800 tonnes of cobalt per year, allowing it to accommodate an increase in cobalt output if necessary.
Its other cobalt-producing enterprise is the Madagascar-based Ambatovy joint venture, a country that may also be troublesome. As a result of cyclones and hurricanes, production fell short of projections in 2018 by coming in at 2,852 tonnes (100% basis) compared to a target of 3,100-3,400 tonnes, but the company has said that it would produce an increase in 2019 compared to 2018 — barring any unanticipated weather circumstances.
Another Canadian cobalt stock with investing potential is Fortune Minerals. It offers a wide assortment of minerals, and this indicates that the company's stock is only slightly correlated to cobalt prices.
The NICO deposit in Canada's Northwest Territories is Fortune Minerals' principal supply of cobalt. The organization just reported the completion of 13 holes of varying depths.
It might enable the manufacture of lithium-ion batteries and other cobalt technologies in North America.
Cobalt, gold, bismuth, and copper will be extracted from a planned mine and concentrator in the Northwest Territories and a hydrometallurgical refinery in the south of Canada.
Outside of Congo, the NICO Project is one of the world's most advanced cobalt development projects, seeking to meet the expanding demand for lithium-ion batteries for electric vehicles, portable electronics, and stationary storage cells.
The business just announced the findings of its 2021 drilling program. Fortune Mineral reports that the deposit holds 37,3 million kilos of cobalt.
Given that the current anticipated market value of cobalt is $8.4 billion, FTMDF is one of the leaders in this business. This stock's growth potential is enormous, and therefore investors should be on high alert.
London-based African Battery Metals is a business. It concentrates on exploration initiatives on the African continent in order to discover new mining prospects.
Cobalt production is dominated by the Democratic Republic of the Congo and Madagascar, and thus it makes sense to concentrate on the African continent. This stock is also an excellent choice if you wish to obtain exposure to the cobalt market's exploratory phase.
The business presently owns three exploration licenses in the Democratic Republic of the Congo, covering a total of 320 square miles. African Battery Metals has an interest in a Sierra Leone mining project.
Compared to other exploration firms, the company's emphasis is narrower. However, the Republic of Congo has been a leading cobalt producer, and these rights might become quite lucrative.
Demand for cobalt is anticipated to treble by 2030, indicating a promising future. Globally, countries have set lofty goals to either expand sales of electric vehicles or eliminate internal combustion engine vehicles completely. Cobalt is also scarce, and therefore those who already own the means of production are well-positioned for the future.
However, this does not mean that cobalt is risk-free. Concerns about its toxicity and its origin in central Africa have led to a rise in manufacturing worries. While cobalt is essential to the creation of batteries at now, research is continuing to limit or even remove its use in batteries. It seems expected that cobalt output will increase during the next several years, but it is less guaranteed that this trend will continue indefinitely.