The second half of 2018 hasn’t been particularly kind to cobalt stocks, but the prospects for the battery metal look more promising in 2019.

Nearly 90 per cent of the small caps that have exposure to cobalt have wiped off between 0.2 per cent and 94 per cent from their share price in 2018.

>> Scroll down for a list of ASX stocks with cobalt exposure, courtesy of leading ASX data provider MakCorp

The price of cobalt plunged from a record high of $US95,000 ($132,072) a tonne in late March to a low of $US44,500 a tonne in early November.

“After so much hype, speculation and media attention, market sentiment is now somewhat depressed,” market intelligence firm Roskill said.

Cobalt’s downfall came after Telsa boss Elon Musk publicly stated the American electric car giant wanted to drastically cut its use of cobalt.

This was followed by a similar proclamation by Japanese electronics giant Panasonic.

China’s biggest lithium battery maker – the $150 billion Contemporary Amperex Technology – also made public its plans to halve the amount of cobalt it uses in its batteries.

Cobalt is used to make the cathode, which conducts electricity flows out of a battery or device.

The cobalt price remained steady at just below $US55,000 a tonne in late November and early December, but by mid-December it again started heading south.

Roskill director Jack Bedder says the late pullback in the price of cobalt can be partially attributed to end-of-year destocking.

But an unexpected last minute bounce sent the price up to $US57,000 a tonne on Tuesday before it edged back to $US55,000 a tonne.

LME cobalt price
LME cobalt price

It’s not over yet

But Roskill says the cobalt slump “may prove short lived”.

“Despite much publicity over the EV industry’s desire to substitute cobalt out of batteries, the outlook for demand remains very strong,” Roskill said.

Mr Bedder says Roskill expects demand from the battery sector alone to reach nearly 100,000 tonnes by 2020 and the market as a whole to reach over 155,000 tonnes.

“New refined supply will mostly come from capacity expansion in China,” he told Stockhead.

Benchmark Mineral Intelligence said earlier this year it expects the order of magnitude of EV sales growth to “far outweigh” efforts to reduce cobalt in batteries.

It forecasts the use of cobalt in lithium-ion batteries will triple by 2026.

While Roskill believes recent purchasing in China was well in excess of demand requirements, it does expect “mass purchasing” of cobalt oxide and sulphate to pick up again down the track.

“Such a resumption would doubtless improve sentiment,” Roskill said.

The market watcher says recent developments such as the Katanga Mining uranium discovery and the classification of cobalt as a “strategic” metal in the Congo (along with a 10 per cent royalty rate) show how quickly the market can change.

Katanga Mining reported in early November that it detected uranium in the cobalt hydroxide produced from its Kamoto project in the Democratic Republic of the Congo (DRC).

This forced the company, a subsidiary of the world’s largest cobalt miner, Glencore, to halt the export and sale of cobalt for at least seven months.

Meanwhile, the DRC government’s decision to hike royalties on cobalt by almost three times to 10 per cent will make cobalt produced in the country more expensive.

More than 60 per cent of the world’s cobalt is mined in the DRC and there are already issues plaguing the supply of the battery metal from the country because of reports of the use of child labour to mine it.

But Mr Bedder says the DRC will remain the world’s main source of cobalt.

“While there are dozens of cobalt projects out there, few are at advanced stages and few are of a large scale,” he said.

“Those that are, are all in the DRC.”

Roskill expects the cobalt market will get its “fair share of headlines” in 2019.

Here’s a list of ASX stocks with exposure to cobalt courtesy of leading ASX data provider MakCorp.

Swipe or scroll to reveal the full table. Click headings to sort.

ASX CodeCompanyMarket CapPrice Intra-day Dec 18Price Jan 1, 2018Total Return Year-to-date
PNN PEPINNINI LITHIUM 3433372.250.0050.082-0.939024
MRD MOUNT RIDLEY MINES 2047036.1250.0010.0114-0.912088
WCN WHITE CLIFF MINERALS 3002678.750.0130.1451-0.910386
MTC METALSTECH 3508616.50.030.275-0.890909
MTH MITHRIL RESOURCES 1996745.750.0060.0462-0.870164
HCO HYLEA METALS 56077470.0010.006-0.833333
G88 GOLDEN MILE RESOURCES 72374970.1050.585-0.820513
FCC FIRST COBALT CORP678643680.2151.19-0.819328
NWC NEW WORLD COBALT 106238590.0190.105-0.819048
N27 NORTHERN COBALT 4166699.250.090.49-0.816327
VAL VALOR RESOURCES 75727690.0040.021-0.809524
FEL FE LTD6304925.50.0140.073-0.808219
RIE RIEDEL RESOURCES 7525254.50.0170.086-0.802326
MEI METEORIC RESOURCES 68934690.0120.059-0.79661
BSX BLACKSTONE MINERALS 115445720.10.49-0.795918
MQR MARQUEE RESOURCES LIMITED2735634.250.0620.275-0.774545
GTE GREAT WESTERN EXPLORATION LT55211960.0060.026-0.769231
MAG MAGMATIC RESOURCES 2579336.50.0280.1057-0.763575
CLQ CLEAN TEQ HOLDINGS 2947987840.3951.485-0.737374
COB COBALT BLUE HOLDINGS 267876100.210.795-0.735849
CFE CAPE LAMBERT RESOURCES 182112280.0160.068-0.735294
RIM RIMFIRE PACIFIC MINING 7487326.50.0070.026-0.730769
MRR MINREX RESOURCES 1917554.50.0240.074-0.72973
TRL TANGA RESOURCES 3819082.50.0020.011-0.728261
CCZ CASTILLO COPPER 115487010.0170.06-0.716667
EUC EUROPEAN COBALT 335146820.0440.155-0.716129
ARL ARDEA RESOURCES 566948240.541.9-0.715789
HGM HIGH GRADE METALS 63411300.0140.049-0.714286
RNX RENEGADE EXPLORATION 2850506.50.0040.014-0.714286
CZN CORAZON MINING 75917000.0050.017-0.705882
SI6 SIX SIGMA METALS 2287515.750.0050.017-0.705882
BMT BERKUT MINERALS 39108000.0720.24-0.7
TKM TREK METALS 24984290.0080.026-0.692308
BPL BROKEN HILL PROSPECTING 4584385.50.0330.1-0.68
BDI BLINA MINERALS 4363882.50.0010.003-0.666667
CAD CAENEUS MINERALS 140630750.0010.003-0.666667
AUZ AUSTRALIAN MINES 1152995440.040.12-0.658333
RMX RED MOUNTAIN MINING 5446257.50.0070.02-0.65
SRN SUREFIRE RESOURCES 2643921.750.0060.0171-0.65
JRV JERVOIS MINING 513504880.2250.65-0.638462
PGM PLATINA RESOURCES 158475740.0570.16-0.6375
LRS LATIN RESOURCES 86375120.0030.011-0.636364
BMG BMG RESOURCES 2852274.250.0070.019-0.631579
CNJ CONICO 6331648.50.0180.051-0.627451
RMI RESOURCE MINING CORP 26664060.010.026-0.615385
CAV CARNAVALE RESOURCES 3947997.250.0060.015-0.6
DEV DEVEX RESOURCES 4137306.750.0450.1112-0.595473
RFR RAFAELLA RESOURCES (Listed July 2018) 3119587.50.0820.20*-0.59
AZS AZURE MINERALS 177599980.1650.39-0.589744
MCT METALICITY 96394200.0180.038-0.578947
SCI SILVER CITY MINERALS 3446943.50.0150.033-0.575758
SBR SABRE RESOURCES 2848815.250.0060.014-0.571429
VMS VENTURE MINERALS 109328520.0210.049-0.571429
PSC PROSPECT RESOURCES 470606440.0230.053-0.566038
NVA NOVA MINERALS 155226830.020.046-0.565217
CAZ CAZALY RESOURCES 52984320.0210.052-0.557692
KTA KRAKATOA RESOURCES 30550000.0260.058-0.551724
SLZ SULTAN RESOURCES (Listed Aug 2018)31432700.090.20-0.55
ARV ARTEMIS RESOURCES 810992240.120.265-0.54717
TAR TARUGA MINERALS 70583620.050.11-0.545455
GBR GREAT BOULDER RESOURCES 108148660.1350.29-0.534483
MEP MINOTAUR EXPLORATION 124290240.0420.085-0.517647
HMX HAMMER METALS 69574270.0220.047-0.510638
CGM COUGAR METALS 28584080.0020.006-0.5
DKM DUKETON MINING 147312020.1250.25-0.5
ELT ELEMENTOS 76866550.0050.01-0.5
BAR BARRA RESOURCES 161667220.0310.061-0.491803
SGQ ST GEORGE MINING 402456880.130.255-0.490196
PIO PIONEER RESOURCES 210575700.0150.029-0.482759
MLM METALLICA MINERALS 90285250.0310.056-0.482143
LTR LIONTOWN RESOURCES 260817120.0250.044-0.477273
TKL TRAKA RESOURCES 6957741.50.0230.042-0.47619
CLA CELSIUS RESOURCES 525854280.0650.125-0.472
SPQ SUPERIOR RESOURCES 4128262.50.0060.0111-0.461538
GME GME RESOURCES 361605160.0750.1392-0.461097
KAI KAIROS MINERALS 213068200.0230.044-0.454545
RNU RENASCOR RESOURCES 207616380.0170.033-0.454545
GED GOLDEN DEEPS 6169708.50.0370.065-0.446154
IPT IMPACT MINERALS 145384780.010.018-0.444444
E2M E2 METALS 39460160.0670.12-0.441667
AOA AUSMON RESOURCES 2184271.750.0050.007-0.428571
RXL ROX RESOURCES 100702450.0080.014-0.428571
AYR ALLOY RESOURCES 47312330.0030.005-0.4
TSC TWENTY SEVEN CO 5352367.50.0060.01-0.4
TYX TYRANNA RESOURCES 94173090.010.018-0.388889
CLY CLANCY EXPLORATION 7008775.50.0020.004-0.375
HAV HAVILAH RESOURCES 349198480.160.255-0.372549
ARE ARGONAUT RESOURCES 341963720.0220.035-0.371429
AVQ AXIOM MINING 414384160.0890.14-0.364286
GBG GINDALBIE METALS 239941920.0170.025-0.36
CZR COZIRON RESOURCES 196410640.0110.017-0.352941
SCN SCORPION MINERALS 37175150.0210.032-0.34375
AYM AUSTRALIA UNITED MINING 2539065.250.0020.003-0.333333
IVR INVESTIGATOR RESOURCES 88796640.0120.018-0.333333
OAR OAKDALE RESOURCES 1372091.3750.0210.031-0.322581
GML GATEWAY MINING 112421510.0130.019-0.315789
TAS TASMAN RESOURCES 301785300.0660.0888-0.313382
RAG RAGNAR METALS 3447664.750.0110.016-0.3125
SUP SUPERIOR LAKE RESOURCES 274201620.030.043-0.302326
MLS METALS AUSTRALIA 7025393.50.00350.005-0.3
HIG HIGHLANDS PACIFIC 808623040.0750.105-0.285714
MAT MATSA RESOURCES 238838440.1550.21-0.285714
PMY PACIFICO MINERALS 8148856.50.0040.007-0.285714
CWX CARAWINE RESOURCES 106093960.170.25-0.28
TLG TALGA RESOURCES 893372880.410.56-0.276786
RDM RED METAL 222871320.1050.145-0.275862
ARN ALDORO RESOURCES (Listed Sep 2018)51511250.1450.20-0.275
ENR ENCOUNTER RESOURCES 154801300.0590.081-0.271605
ALY ALCHEMY RESOURCES 6165872.50.0130.0178-0.268636
DGO DGO GOLD 187319400.7451.0184-0.268483
HLX HELIX RESOURCES 123095340.0290.042-0.261905
E25 ELEMENT 25 142739400.170.23-0.26087
PRX PRODIGY GOLD 326826780.0680.092-0.26087
STA STRANDLINE RESOURCES 314276140.0980.13-0.246154
AOU AUROCH MINERALS 77027760.0780.1-0.22
NZC NZURI COPPER 828535360.2750.345-0.202899
AML AEON METALS 1498047840.2450.305-0.196721
SFM SANTA FE MINERALS 65536910.090.11-0.181818
GAL GALILEO MINING (Listed May 2018)204635680.170.20-0.15
KRX KOPPAR RESOURCES (Listed May 2018)55562500.170.20-0.15
ERM EMMERSON RESOURCES 282330580.0680.083-0.144578
TNG TNG 1156160960.120.14-0.142857
ZEN ZENITH ENERGY671300000.640.75-0.133333
FIN FIN RESOURCES 4375371.50.0160.0183-0.127273
POS POSEIDON NICKEL 1109934800.0420.049-0.122449
WKT WALKABOUT RESOURCES 289037260.090.105-0.114286
KOR KORAB RESOURCES 7671399.50.0240.028-0.107143
IAU INTREPID MINES 137859921.021.1-0.090909
ORN ORION MINERALS 468433360.0240.026-0.076923
PAN PANORAMIC RESOURCES 1829753600.3750.3984-0.058735
AMG AUSMEX MINING GROUP 287665300.0680.069-0.014493
AXEARCHER EXPLORATION134000000.070.13-0.5%
AX8ACCELERATE RESOURCES52000000.110.195-0.4%
A4NALPHA HPA567000000.10.14-0.3%
CLZCLASSIC MINERALS78000000.0030.004-0.3%
CDUCUDECO (Suspended since Mar 2018)920000000.2350.31-0.2%
CTM CENTAURUS METALS 161348750.00650.0070%
LEG LEGEND MINING 613305240.0320.030%
AZYANTIPA MINERALS379000000.210.210%
HARHARANGA RESOURCES (Suspended since Jan 2018)15000000.0030.0030%
WFEWINMAR RESOURCES582000000.0240.00450.0433
ACB A-CAP ENERGY 435942440.0520.0490.061225
MGU MAGNUM MINING AND EXPLORATION181726240.0580.060.083333
DGR DGR GLOBAL 827795520.130.1150.130435
HIP HIPO RESOURCES 69571880.0150.01470.160318
RDS REDSTONE RESOURCES 83757020.0160.01350.187384
MGV MUSGRAVE MINERALS 307379480.0950.0790.189873
VMC VENUS METALS CORP 152567380.160.130.230769
AIV ACTIVEX 354456800.20.160.25
CZI CASSINI RESOURCES 307501320.0890.0710.253521
CHK COHIBA MINERALS 99692140.0140.010.4
ANW AUS TIN MINING 336289040.0170.0110.545455
ADY ADMIRALTY RESOURCES 184658500.0160.0071.285714

Hitting bottom

The biggest loss of the year goes to PepinNini Lithium (ASX:PNN), which has wiped off 94 per cent.

Though that probably has more to do with its key focus being lithium and the fears of oversupply that surround the battery metal at the moment.

PepinNini has exposure to cobalt through its wholly owned NiCul Minerals subsidiary, which is exploring for nickel, copper and cobalt in the Musgrave province of South Australia.

Mount Ridley Mines (ASX:MRD) is down 91 per cent since the start of 2018.

The company is exploring for nickel, copper, cobalt, silver and gold in the prolific Fraser Range region of Western Australia.

The Fraser Range region shot to fame back in 2012 when Sirius Resources uncovered the Nova-Bollinger nickel, copper and cobalt mine that eventually sold to larger rival Independence Group (ASX:IGO) for $1.8 billion.

This prompted a mad scramble by other explorers to pick up land in the area, followed by Independence striking numerous deals with the juniors to stitch up a large chunk of prospective ground.

Successful prospector Mark Creasy, who was also a partner in the Nova-Bollinger discovery, recently made a new nickel, copper and cobalt discovery called “Silver Knight”.

This prompted Mount Ridley to review the data for its namesake project to identify targets for further testing.

The company revealed in August that drilling at the project had been delayed due to “drilling difficulty”.

White Cliff Minerals (ASX:WCN) is also facing a few problems, including an attempt to have one of its directors evicted.

The stock has fallen 91 per cent, starting its downhill slide back in April.

White Cliff announced in August that it was divesting non-core projects and undertaking a share consolidation.

The company wanted to crystallise the value of its Australian cobalt and nickel projects.

But in mid-December White Cliff received a “249D” notice calling for a meeting to be held to allow shareholders to vote on the removal of director Rodd Boland.

At the same time, the company announced the exit of chairman Jack Gardner and the appointment of Nicholas Ong and Daniel Smith as directors.

On a tear

Just 13 of the 153 ASX listed small caps that have exposure to cobalt increased in value during 2018.

The biggest gainer was diversified explorer Admiralty Resources (ASX:ADY), which added 126 per cent to its share price since the start of the year.

The company’s key focus is its Mariposa iron ore mine in Chile, but it also has a cobalt and nickel project known as “Pyke Hill” in Western Australia.

Admiralty’s shares spiked in April after it received long awaited approvals to start mining iron ore in Chile.

The company took out seventh spot in Stockhead’s Top 10 resources small caps for 2018.

Cohiba Minerals (ASX:CHK) has climbed 40 per cent since January.

The company acquired Cobalt X in mid-2017 which has several cobalt exploration licences in Queensland.

But its shares took off in late November in response to news of BHP’s (ASX:BHP) big copper discovery, 65km southeast of its mammoth Olympic Dam operations in South Australia.

Cohiba has land right next door and told investors it was stepping up its exploration effort in light of BHP’s spectacular find.

 

Stockhead is proud to use MakCorp as a provider of great value, accurate and reliable data on ASX-listed mining stocks. For more information head to MakCorp’s website.

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This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.