Cobalt is an essential raw material in a number of important technologies, including rechargeable lithium-ion batteries. It has applications in jet engines to gas turbine generators specifically for its ability to maintain strength at high temperatures. The recent boom in the clean-technology industry has given new focus to energy storage – of which Solar City and Tesla are at the forefront. Tesla’s Elon Musk has stated in the past that he hopes to source cobalt exclusively from North America by 2017 for the production of lithium-ion batteries critical to the success of their electric vehicles. Tesla’s first large-scale battery production facility, dubbed “Gigafactory 1” has commenced operation in the summer of 2017. Tesla has targeted 20 similar facilities around the world, each producing enough batteries for 500,000 electric vehicles.
Unsustainable supply chain
The Democratic Republic of Congo is the largest global producer of cobalt, with 66,000 metric tonnes produced in 2016. According to UNICEF, about 40,000 children work in cobalt mines with their bare hands and earning less than US$2.00 per day – sometimes in shifts up to 24 hours underground at a time. According to Deutsche Welle (DW), many automakers including BMW have admitted to using cobalt mined from Congo in the production of certain batteries.
At Hybrid Minerals, we believe that cobalt must be mined in an ethical and transparent manner. Hybrid Minerals is interested in collaborating with automakers and clean-tech companies to secure their cobalt supply chain by using only cobalt mined in North America.
Investing in cobalt
Cobalt futures can be traded on the London Metals Exchange, but limited transaction volume means higher volatility. For the average investor, the more prudent way of capturing the potential upside of cobalt demand is to invest in cobalt stocks.
- eCobalt Solutions (TSE:ECS)
- US Cobalt (formerly Scientific Metals Corp) (CVE:USCO)
- International Cobalt (CSE:CO)
In June 2017, Hybrid Minerals signed a Letter of Intent to be acquired by Savoy Ventures (SVO.H), a publicly-listed company on the TSX Venture exchange.