Most DRC cobalt comes from an area known as the Central African Copper Belt, which hosts most of the country’s cobalt-hosting deposits. The country also holds nearly half of global cobalt reserves, cementing its dominance. Given those factors, many investors are now wondering how to invest in cobalt. To help those interested in the sector, we’ve put together a brief guide on cobalt supply and demand and different investing options. The Amplify Lithium & Battery Technology ETF also isn’t a direct investment in cobalt.
Risks of investing in cobalt
The fund focuses more on battery technology, which is a key driver of cobalt demand. The iShares MSCI Global Metals & Mining Producers ETF has top holdings in some of the world’s largest cobalt producers. Notable names included Glencore (GLNCY -4.98%) and top copper producer BHP Group (BHP -4.34%), which obtains cobalt from its nickel- and copper-refining influence of a single ether bond on assembly orientation and miscibility activity. In 2021, BHP signed a partnership agreement with AI computing start-up KoBold Metals, which uses algorithms to make decisions on land purchasing and exploration. With this said, impact investors can profit from investing in cobalt, but only if they do lots of research. Ensure you have a deliberate strategy before hopping onto the cobalt party train if the market sentiment starts to move against you.
- Whereas electric-powered products are more eco-friendly than gas or coal-powered ones, some have speculated whether cobalt mining can is sustainable.
- These companies make the building blocks of everything we use and consume.
- This company based in Australia offers industrial treatment water services and metal recovery.
- Has a market cap of around $92 billion with over $40 billion in revenue in December 2020.
- Since cobalt is a byproduct of other mining activities, investing directly in the element outside of specific mining stocks isn’t easy.
Are Cobalt Stocks a Good Investment?
Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor’s degree in English education as well as a master’s degree in the teaching of writing, both from Humboldt State University, California. “Falling cobalt prices may lead OEMs in certain markets to reconsider lower nickel NCM batteries, with higher cobalt content, due to the potential cost savings,” notes Fastmarkets in its report. Fastmarkets analysts are “forecasting an ongoing and widening surplus in the global cobalt market in 2024”.
Is trading cobalt ETFs safe?
With companies relying on cobalt to build eco-friendly products, demand for the element has increased exponentially. Batteries that power these electronics account for 50 percent of the world’s cobalt consumption. It’s most heavily weighted towards specialty chemicals (24.6% of the fund’s holdings) and industrial gases (19.7%). However, it offers deutsche bank to create dublin jobs exposure to copper producers (4.6%), which also tend to produce cobalt.
Civil unrest and political instability have the potential to affect supply chains, and there is no guarantee of the security of cobalt operators. Cobalt mining is also rife with conditions that may violate human rights. Cobalt is still not considered a conflict mineral today, but several human rights groups are already lobbying for it to receive this distinction. Most of DRC’s cobalt mines and operations are poorly managed and dangerous, and these human rights groups believe dash core wallet that end-users should source their metal elsewhere. Like its cousin nickel, cobalt is a hard, silver-gray metal derived from the earth’s crust in a chemically combined form, except for small deposits found in meteoric iron.
Several advisors are still bullish on the metal, even if it hasn’t recovered the prices it reached in 2018. It’s also very challenging to tell which cobalt companies will lead the market. This requires investors, especially those investing with ECG in mind, to do their research and take an educated position. This Vancouver-based precious metals streaming company has various streaming agreements with several minds worldwide. The company has proven reserves of tens of millions of pounds along with reserves of silver, palladium, and gold.
This Brisbane-based mining firm focuses on developing and mining metals for emerging technologies, with interests in cobalt-scandium-nickel projects in Australia. It has a market cap of around $63 million and annual revenue of around $17 million. Although the exposure ratio to copper producers is relatively low at just 5%, the Vanguard Materials ETF gives wider exposure across the materials sector.
The easiest way to invest in cobalt is through mining companies. Three are Wheaton Precious Metals (WPM), Carpenter Technology (CRS), and Vale (VALE). While Wheaton has deals with mines around the world to store metals, Carpenter helps distribute metals and Vale mines them. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.