[Cobalt] The ‘Minor Metal’ with a major impact – by Stockhouse Editorial (November 3, 2016)


Humans have been producing the major metals for thousands of years. Gold, copper, silver, iron … the big hitters. The “minor metals” are those that have relatively small global production, and are primarily a by-product of a base metal.

No one would be surprised to hear that tellurim, for example, is a minor metal. A by-product of gold, lead or copper mining, global production of tellurim is a miniscule 220 tonnes a year. The Minor Metals Trade Association lists 49 metals it currently considers “minor metals”, presenting them in a helpful version of the periodic table. One metal that we think should be removed from that list is #27, cobalt. It’s about to have a major impact on your portfolio.

First, the conclusion: we are entering a prolonged global cobalt shortage. Consumption is skyrocketing, production is decreasing. Basic economics says this is low-hanging fruit for investors to pick.
Now, the facts supporting that conclusion, starting with decreased production. Cobalt is a by-product of nickel and copper mining. Roughly 97 – 99% of the world’s supply comes through that route. That means if nickel and copper mines are shut in, whether for environmental reasons as is happening in the Philippines or due to depressed commodity pricing, then we lose the cobalt production as well. It’s not possible to just mine the cobalt.

The Philippines produced about 4,600 tonnes of cobalt last year, or about 4% of the world’s supply. That production is at risk.

Production out of the Congo is also at risk. That risk is key to our investment thesis because the DRC is the world’s largest producer of cobalt, which as a by-product of its large-scale copper mining accounts for roughly 55% of global production. The copper is mined mainly out of the Katanga belt.

For the rest of this article, click here: http://www.stockhouse.com/news/newswire/2016/10/31/the-minor-metal-with-major-impact