Cobalt Global Forecast: Industry Executives Optimistic Cobalt Demand to Exceed Supply

PALM BEACH, Florida, July 17, 2019 /PRNewswire/ — Cobalt is in demand and the global Cobalt community is worried about future supplies; which means companies and countries will be looking for as of yet undiscovered sources. With so many uses the development of a more consistent supply chain is of great importance to countries around the world. Sciencing on its website says the US government treats cobalt as a strategic metal because a shortage would affect the economy, industry and defense of the country. Most cobalt used in the United States is imported. Plus, according to a European Commission report, Cobalt supply has issues of concentration and risk of disruption, as it is mainly produced in Democratic Republic of Congo and China. According to our assessment these risks will persist in the future, likely increasing in the near term until 2020. Despite this, worldwide, demand is already perceived to exceed supply in 2020 and such a loss making trend is expected to become more consistent from 2025 on. In the EU, although the capacity to meet rising demand is projected to increase through mining and recycling activities, there is an increasing gap between endogenous supply and demand. The EU’s supplies of cobalt will increasingly depend on imports from third countries. Active mining stocks in the markets this week include 21C Metals Inc. (CSE: BULL) (OTCQB: DCNNF), First Cobalt Corp. (TSX-V: FCC) (OTCQX: FTSSF), Pacific Rim Cobalt Corp. (CSE: BOLT) (OTCQB: PCRCF), Sherritt International Corporation (TSX: S) (OTCPK: SHERF), eCobalt Solutions Inc. (TSX: ECS) (OTCQX: ECSIF).

As a result of the accelerated introduction of electric vehicles (EVs), the demand for lithium-ion batteries (LIB) is expected to increase significantly in the future. However, a potential limiting factor in the deployment of LIBs may be the supply of cobalt, largely used in a number of conventional battery chemistries. Potential disruptions in cobalt supply can arise from the near-monopolistic supply structures for both mined and refined cobalt, unethical practices in producing countries, the long lead-time for developing new mining projects, and the fact that cobalt is mainly mined and recovered as a co- or by-product of copper and nickel.