When you’re thinking about investing in precious metal, you’d probably gravitate the most popular ones – ones used in jewelry. You’d pay no mind to the metals with industrial applications. But you would be wrong to ignore one the fastest growing metal – cobalt.
Hard, shiny and greyish, this metal might hold the key to revolutionizing the entire tech industry was the central theme in the cobalt conference of 2018. With prices currently hovering at $37 a pound, or $80,000 per metric ton, cobalt makes a great choice of investment.
A raging demand
Probably you’ve heard of Elon Musk and his impressive range of Tesla cars. Okay, you can’t call them cars as these electric vehicles are something of a marvel, a revolution in the motoring industry. These rides are outclassing just about any other electric vehicle on the market.
The secret to the cars’ high performance? A long-lasting battery containing about 15 percent cobalt. To power, these beasts, batteries weight up to several hundred pounds, creating a high demand for the rare metal. As the popularity of the Tesla model rises, so does the demand for cobalt and it won’t be slowing down in future.
A low supply
About 15 percent of the world’s supply comes from primary cobalt mining as the native metal is in short supply. It is found in low concentration in the earth’s crust about 0.002 percent. The other 85 percent is produced as a byproduct in the copper and Nickel mines, with nickel mining accounting for 50 percent.
Half the world’s cobalt reserve is found in a copper belt in the Democratic Republic of Congo. The country’s checkered history often dings the supply as it is rocked by both economic and political instabilities. Refining cobalt is power intensive process. As a result, China refines 41 percent of the world’s supply. It doesn’t help matters that China is the world’s largest consumer of cobalt.
Without an in-depth knowledge of the metals uses as well as demand and supply, you might ignore cobalt as an investment choice. However, the growing demand and popularity of the metal spell nothing but good fortune for any investor.