If development of the project is successful, the company hopes commercialization of the cobalt produced at the site can help it become a top producer of raw material for the battery industry. As a miner of nickel and copper, Vale is also an ancillary supplier of cobalt. It isn’t a significant revenue generator for Vale, but the company is nonetheless worth mentioning, given its status as a top miner of basic metals used in all sorts of industries. 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. This ETF consists of more than 250 mining stocks, including prominent companies like Glencore and BHP Group, which obtains cobalt from its copper- and nickel-refining processes.
- Given those factors, many investors are now wondering how to invest in cobalt.
- While long used as an industrial metal, cobalt has also been a relatively niche material.
- This is a major sector of investing, with both professionals and retail investors alike putting their money into assets like coffee, steel and corn every day.
- The biggest advantage to investing in cobalt right now is its surge in demand.
The fund focuses more on battery technology, which is a key driver of cobalt demand. If you’re interested in a more direct investment in mining stocks, the iShares MSCI Global Metals & Mining Producers ETF is a top choice. Its portfolio consisted of 259 global mining stocks as of early 2023. The companies that have interests in the cobalt business were selected for the list and ranked according to hedge fund sentiment.
Besides mining, cobalt processing is also an important part of the supply chain with a monopoly. With the global cobalt recycling market still in infancy, logistical problems and shipping disruptions routinely emerge as major headwinds for the industry. Even though the electric vehicle revolution has been more than a decade in the making, the cobalt supply chain has not grown with it. Per price reporting agency Fast Markets, EVs have been the primary consumer of cobalt since 2021. Due to volatile pricing though, EV firms have started using lithium iron phosphate (LFP) in battery manufacturing, decreasing their reliance on cobalt. However, due to properties relating to thermal stability and higher energy density, cobalt remains a battery tech behemoth.
Focus on investing in established businesses with a track record of generating healthy profit margins, especially if you are an investor seeking more stable returns or investment income. It is a top user of cobalt as well, and China Molybdenum is how to buy and sell bitcoins a top producer of the element. The Vanguard Materials ETF is a large fund focusing on companies that produce base materials and metals. It offers broad exposure to the material sector (including cobalt) for a very low ETF expense ratio of 0.1%.
Cobalt isn’t usually exclusively mined, as it is acquired in conjunction with another metal. This means most of the companies listed below don’t deal exclusively in cobalt. The OECD Guidance for Multinational Companies has different due diligence requirements for companies, depending on their responsibilities and location in the supply chain.
Consider working with a financial advisor as you evaluate your asset allocations and consider new sectors to invest in. The Vanguard Materials ETF offers a modest dividend yield of 1.6%, making it ideal for investors in search of passive investment income. Here’s a closer look at some of the top ETFs to consider buying to capitalize on the expected rise in cobalt demand.
There has been a massive rise in demand for electric vehicles over the past few years. It focuses on the mining industry’s base metals, ferrous metals, and coal segments. Has a market cap of around $92 billion with over $40 billion in revenue in December 2020. 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.
To help those interested in the sector, we’ve put together a brief guide on cobalt supply and demand and different investing options. To investors, natural resources are known as the “commodities” market. This is a major sector of investing, with both professionals and retail investors alike putting their money into assets like coffee, steel and corn every day. Although, given the extreme volatility of this market and the potential for losses that exceed your initial investment, retail investors should generally avoid direct investment in commodities.
Freeport-McMoRan is one of the largest producers of copper, used throughout the global economy. As a copper miner, cobalt is part of the company’s portfolio of ufx universal flashing s6a 1140mm x 1180mm assets. Cobalt is an industrial metal, prized for its physical properties, which has a wide variety of applications in electronics, metalworking, art and more.
In order to provide readers with some context for their investment choices, the analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Cobalt prices had registered record highs in May 2022 but have since windows network engineer in hoboken nj dropped more than 65% to around $15 per lb. Macquarie analyst Jim Lennon expects the cobalt surplus to grow from 8,600 metric tons in 2023 to more than 10,400 metric tons in 2025. The switch to LFP batteries in Asia is expected to keep the demand of cobalt in check. This will result in a reliance on imports to source the needed cobalt for EV battery manufacturing.
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Applications include engines and turbines, which it is prized for its corrosion and heat resistance. It’s also used in batteries and electronics, steel and alloy smelting, chemical engineering, medical devices and even art. Cobalt blue, made from powdered cobalt metal, has also long been a prized color for paints and glazes. Cobalt is a relatively common metallic element with physical properties broadly similar to nickel and iron. It is hard and (unlike iron) brittle, and generally nonreactive to common environments like air and water. It can be toxic when inhaled or otherwise ingested and has a very potent lab-created radioactive isotope.
Step 4: Place your order and trade cobalt ETFs
As its name suggests, Wheaton Precious Metals is an investment in elements like gold and silver. Besides precious metals, Wheaton also acquires significant amounts of cobalt. Freeport-McMoRan is another global mining and energy company and is based in Arizona.
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Although it’s not a pure play on cobalt, this ETF is lower risk because it offers broader exposure to the entire materials sector. Investing in cobalt ETFs requires access to the corresponding market first. Investors can simply obtain it by using a third-party investing service.
Ways to Invest in Cobalt (Sustainably)
The battery sector is one of the biggest cobalt consumers, as lithium-ion battery production requires it. Smartphones, computers, electric vehicles, and many modern industries require batteries. It is the world’s top producer of iron and nickel, as well as a top producer of other metals used in battery manufacturing such as manganese and copper. For ideas on cobalt stocks to invest in, check out our list of the biggest producers of the metal — these are some of the largest names in the sector. You can also read our overview of Canadian cobalt companies that have seen year-to-date gains, and our list of the biggest cobalt stocks on the ASX by market cap. Cobalt is mainly produced as a by-product of copper and nickel, with the DRC supplying the bulk of the world’s cobalt.
They also provide high-tech extraction and purification technologies of base and precious metals, and an interest in mining nickel. The company has a $200 million market cap with more than $22 million in earnings annually. The battery sector in particular has become a major source of cobalt demand.
Cobalt is a hard and lustrous metal and commodity found only in chemically combined form. Like lithium, it plays an integral role in the production of rechargeable batteries for electric vehicles (EVs), renewable energy storage, and consumer electronics. Conveniently, cobalt is usually a byproduct of mining for other renewable energy-related metals, like copper. As the world hastens the transition towards green energy, the demand for cobalt shows significant growth potential. Because of this, you might want to consider investing in cobalt now.