Glencore is the world’s largest cobalt producer with mines in the DRC, Australia and Canada. Glencore PLC’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2020 was $11.6 billion. The company operates in over 35 countries and employs 135,000 people. Glencore’s partnership with DRC-based Katanga Mining Limited gives Glencore a reliable source of cobalt. Glencore stock ADRs also currently qualify for our stocks under $10 per share category and could be a good fit for your portfolio if you’re looking to invest in a cobalt miner.
Wheaton Precious Metals (NYSE:WPM)
Wheaton Precious Metals Corp is a precious metal streaming company. The company has entered into over 20 long-term purchase agreements with 17 different mining companies, for the purchase of precious metals and cobalt. It has streaming agreements covering approximately 19 operating mines and 9 development stage projects. The company’s projects include Vale’s Salobo mine and silver streams on Glencore’s Antamina mine and Goldcorp’s Penasquito mine
Brazil-based Vale S.A. is the world’s largest producer of iron ore, pellets and nickel. The company has operations in 30 other countries and also provides logistics, state-of-the-art infrastructure development, railways, ports, terminals, and energy and steel manufacturing facilities. This miner generates less than 1% of its total revenue from cobalt, so it does not qualify as a pure cobalt play. Interestingly, the company recently struck a deal with Cobalt 27 Capital and Wheaton Precious Metals that involves Vale S.A. selling 75% of the cobalt production from its Canadian Voisey Bay mine to the other two companies to bring in $690 million to fund 40% of the mine’s expansion. Vale S.A.’s stock has had a yearly range of $9.28 to $23.02 thus far, and it currently trades just outside of our stocks under $20 category.
Canada Nickel Co (OTCQX:CNIKF)
Canadian Nickel Co. was recently listed on the OTCQB Venture Market for entrepreneurial and developing companies. Canada Nickel is firmly anchored in its Crawford Nickel-Cobalt Sulphide Project in the Timmins-Cochrane mining camp in Ontario, Canada. The miner is involved in advancing next-generation nickel-cobalt sulphide production to satisfy the needs of the growing EV and stainless steel markets. The company has also applied in several jurisdictions for the trademark of the terms NetZero NickelTM, NetZero CobaltTM and NetZero IronTM for its development of a process that allows for the production of net-zero cobalt, iron and nickel products. The current level of Canada Nickel Co.’s stock qualifies it for our stocks under $5 category after it hit a high of $3.51 on February 17, 2021. The stock could appreciate substantially from its current price given the likely strong future demand for cobalt in EV manufacturing and other products containing cobalt, iron and nickel.
Cobalt is a byproduct of nickel and copper mining. In recent years, cobalt has taken its place as one of the world’s most sought-after commodities due to its use in semiconductor chips and the lithium-ion batteries used in electric vehicles (EVs), smartphones and other electronic devices. That's why investors should learn about cobalt stocks.
More than half of the world’s supply of cobalt originates in the Democratic Republic of Congo (DRC). Other major cobalt producers include Russia, Canada, Australia, the Philippines and Cuba.
Cobalt has to be processed before it can be brought to market. While China produces only a fraction of global cobalt supplies, the country is responsible for refining more than half of the world’s cobalt. China also dominates the use of cobalt due to its status as the world’s largest manufacturer of electronics.
Because of growing interest in EVs and cobalt’s use in semiconductors, demand for the metal is expected to grow at a compounded annual growth rate of 9% through 2026. Investing in cobalt mining stocks, therefore, makes a lot of sense as both an inflation hedge and for long-term capital gains. Cobalt stocks can turn the tide for your portfolio, assuming you’ve chosen the appropriate investments for your financial situation.
Quick Look at the Best Cobalt Stocks:
Overview: Best Cobalt Stocks
Investing in cobalt stocks has recently become popular among hedge funds due to the numerous industrial applications of this transition metal. The main drivers for the cobalt mining industry continue to be the metal’s use in lithium ion batteries for the growing EV market.
Cobalt also plays a role in the superalloys used to manufacture turbine engines, as well as in the treatment of cancer with radiation from cobalt-60 and in medical equipment sterilization. Cobalt is also used in dental, orthopaedic and prosthetic medical implants. Other applications for cobalt include the manufacture of tooling materials, catalysts, pigments and permanent magnets.
Securities focused on cobalt, then, may cover a wide range of industries and purposes. You can diversify within your cobalt investments so that you aren’t dependent on a particular industry’s success.
Best Online Brokers for Cobalt Stocks
One of our selections, Vale S.A., has its American Depository Receipts (ADRs) listed on the New York Stock Exchange (NYSE), so any major stock broker that fills orders on the NYSE can execute your order. Because most of our picks trade in the over-the-counter (OTC) market, however, you should check with brokers you wish to use to find out if they can execute client orders in that market.
Features to Look for in Cobalt Stock
- Mines: Because cobalt is normally a byproduct of nickel and copper mining, the mines that a company owns or invests in are one of the most important factors for a cobalt stock. For example, Glencore’s cobalt-producing mines are primarily located in the DRC that produces a large share of the world’s cobalt, although political upheaval could destabilize the country and impact Glencore’s stock price.
- Fundamentals: As with other stocks, you should evaluate the company’s fundamentals and see whether they are currently profitable or have good future prospects that will eventually make them profitable. Statistics like the stock’s earnings per share and other major indicators of the company’s financial health can give additional indications of how well the stock could perform.
- Partnerships: Because many mining companies are based outside of the countries where their cobalt-producing mines are located, international mining companies often form partnerships with local miners. Such partnerships can impact cobalt production and often provide the primary business framework for smaller mining companies.
Are Cobalt Stocks a Good Investment?
With the increased popularity of EVs and growing demand for other industrial applications of cobalt, investing in cobalt stocks makes a lot of sense both as a long-term investment and as an inflation hedge.
Cobalt is increasingly used in cutting-edge technologies that can show impressive future growth. This trend suggests that investing in cobalt stocks from large mine operators to companies in the mine development stage could produce considerable returns over time for a patient investor.
Frequently Asked Questions
What is cobalt used for?
Cobalt is used for electronics and electric vehicles.
What country mines the most cobalt.
China mines more than half of the world’s cobalt.
What are the best cobalt stocks?
The best cobalt stocks are listed in Benzinga’s best of list above.