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 Code Company Market Cap Price Intra-day Dec 18 Price Jan 1, 2018 Total Return Year-to-date
PNN PEPINNINI LITHIUM 3433372.25 0.005 0.082 -0.939024
MRD MOUNT RIDLEY MINES 2047036.125 0.001 0.0114 -0.912088
WCN WHITE CLIFF MINERALS 3002678.75 0.013 0.1451 -0.910386
MTC METALSTECH 3508616.5 0.03 0.275 -0.890909
MTH MITHRIL RESOURCES 1996745.75 0.006 0.0462 -0.870164
HCO HYLEA METALS 5607747 0.001 0.006 -0.833333
G88 GOLDEN MILE RESOURCES 7237497 0.105 0.585 -0.820513
FCC FIRST COBALT CORP 67864368 0.215 1.19 -0.819328
NWC NEW WORLD COBALT 10623859 0.019 0.105 -0.819048
N27 NORTHERN COBALT 4166699.25 0.09 0.49 -0.816327
VAL VALOR RESOURCES 7572769 0.004 0.021 -0.809524
FEL FE LTD 6304925.5 0.014 0.073 -0.808219
RIE RIEDEL RESOURCES 7525254.5 0.017 0.086 -0.802326
MEI METEORIC RESOURCES 6893469 0.012 0.059 -0.79661
BSX BLACKSTONE MINERALS 11544572 0.1 0.49 -0.795918
MQR MARQUEE RESOURCES LIMITED 2735634.25 0.062 0.275 -0.774545
GTE GREAT WESTERN EXPLORATION LT 5521196 0.006 0.026 -0.769231
MAG MAGMATIC RESOURCES 2579336.5 0.028 0.1057 -0.763575
CLQ CLEAN TEQ HOLDINGS 294798784 0.395 1.485 -0.737374
COB COBALT BLUE HOLDINGS 26787610 0.21 0.795 -0.735849
CFE CAPE LAMBERT RESOURCES 18211228 0.016 0.068 -0.735294
RIM RIMFIRE PACIFIC MINING 7487326.5 0.007 0.026 -0.730769
MRR MINREX RESOURCES 1917554.5 0.024 0.074 -0.72973
TRL TANGA RESOURCES 3819082.5 0.002 0.011 -0.728261
CCZ CASTILLO COPPER 11548701 0.017 0.06 -0.716667
EUC EUROPEAN COBALT 33514682 0.044 0.155 -0.716129
ARL ARDEA RESOURCES 56694824 0.54 1.9 -0.715789
HGM HIGH GRADE METALS 6341130 0.014 0.049 -0.714286
RNX RENEGADE EXPLORATION 2850506.5 0.004 0.014 -0.714286
CZN CORAZON MINING 7591700 0.005 0.017 -0.705882
SI6 SIX SIGMA METALS 2287515.75 0.005 0.017 -0.705882
BMT BERKUT MINERALS 3910800 0.072 0.24 -0.7
TKM TREK METALS 2498429 0.008 0.026 -0.692308
BPL BROKEN HILL PROSPECTING 4584385.5 0.033 0.1 -0.68
BDI BLINA MINERALS 4363882.5 0.001 0.003 -0.666667
CAD CAENEUS MINERALS 14063075 0.001 0.003 -0.666667
AUZ AUSTRALIAN MINES 115299544 0.04 0.12 -0.658333
RMX RED MOUNTAIN MINING 5446257.5 0.007 0.02 -0.65
SRN SUREFIRE RESOURCES 2643921.75 0.006 0.0171 -0.65
JRV JERVOIS MINING 51350488 0.225 0.65 -0.638462
PGM PLATINA RESOURCES 15847574 0.057 0.16 -0.6375
LRS LATIN RESOURCES 8637512 0.003 0.011 -0.636364
BMG BMG RESOURCES 2852274.25 0.007 0.019 -0.631579
CNJ CONICO 6331648.5 0.018 0.051 -0.627451
RMI RESOURCE MINING CORP 2666406 0.01 0.026 -0.615385
CAV CARNAVALE RESOURCES 3947997.25 0.006 0.015 -0.6
DEV DEVEX RESOURCES 4137306.75 0.045 0.1112 -0.595473
RFR RAFAELLA RESOURCES (Listed July 2018) 3119587.5 0.082 0.20* -0.59
AZS AZURE MINERALS 17759998 0.165 0.39 -0.589744
MCT METALICITY 9639420 0.018 0.038 -0.578947
SCI SILVER CITY MINERALS 3446943.5 0.015 0.033 -0.575758
SBR SABRE RESOURCES 2848815.25 0.006 0.014 -0.571429
VMS VENTURE MINERALS 10932852 0.021 0.049 -0.571429
PSC PROSPECT RESOURCES 47060644 0.023 0.053 -0.566038
NVA NOVA MINERALS 15522683 0.02 0.046 -0.565217
CAZ CAZALY RESOURCES 5298432 0.021 0.052 -0.557692
KTA KRAKATOA RESOURCES 3055000 0.026 0.058 -0.551724
SLZ SULTAN RESOURCES (Listed Aug 2018) 3143270 0.09 0.20 -0.55
ARV ARTEMIS RESOURCES 81099224 0.12 0.265 -0.54717
TAR TARUGA MINERALS 7058362 0.05 0.11 -0.545455
GBR GREAT BOULDER RESOURCES 10814866 0.135 0.29 -0.534483
MEP MINOTAUR EXPLORATION 12429024 0.042 0.085 -0.517647
HMX HAMMER METALS 6957427 0.022 0.047 -0.510638
CGM COUGAR METALS 2858408 0.002 0.006 -0.5
DKM DUKETON MINING 14731202 0.125 0.25 -0.5
ELT ELEMENTOS 7686655 0.005 0.01 -0.5
BAR BARRA RESOURCES 16166722 0.031 0.061 -0.491803
SGQ ST GEORGE MINING 40245688 0.13 0.255 -0.490196
PIO PIONEER RESOURCES 21057570 0.015 0.029 -0.482759
MLM METALLICA MINERALS 9028525 0.031 0.056 -0.482143
LTR LIONTOWN RESOURCES 26081712 0.025 0.044 -0.477273
TKL TRAKA RESOURCES 6957741.5 0.023 0.042 -0.47619
CLA CELSIUS RESOURCES 52585428 0.065 0.125 -0.472
SPQ SUPERIOR RESOURCES 4128262.5 0.006 0.0111 -0.461538
GME GME RESOURCES 36160516 0.075 0.1392 -0.461097
KAI KAIROS MINERALS 21306820 0.023 0.044 -0.454545
RNU RENASCOR RESOURCES 20761638 0.017 0.033 -0.454545
GED GOLDEN DEEPS 6169708.5 0.037 0.065 -0.446154
IPT IMPACT MINERALS 14538478 0.01 0.018 -0.444444
E2M E2 METALS 3946016 0.067 0.12 -0.441667
AOA AUSMON RESOURCES 2184271.75 0.005 0.007 -0.428571
RXL ROX RESOURCES 10070245 0.008 0.014 -0.428571
AYR ALLOY RESOURCES 4731233 0.003 0.005 -0.4
TSC TWENTY SEVEN CO 5352367.5 0.006 0.01 -0.4
TYX TYRANNA RESOURCES 9417309 0.01 0.018 -0.388889
CLY CLANCY EXPLORATION 7008775.5 0.002 0.004 -0.375
HAV HAVILAH RESOURCES 34919848 0.16 0.255 -0.372549
ARE ARGONAUT RESOURCES 34196372 0.022 0.035 -0.371429
AVQ AXIOM MINING 41438416 0.089 0.14 -0.364286
GBG GINDALBIE METALS 23994192 0.017 0.025 -0.36
CZR COZIRON RESOURCES 19641064 0.011 0.017 -0.352941
SCN SCORPION MINERALS 3717515 0.021 0.032 -0.34375
AYM AUSTRALIA UNITED MINING 2539065.25 0.002 0.003 -0.333333
IVR INVESTIGATOR RESOURCES 8879664 0.012 0.018 -0.333333
OAR OAKDALE RESOURCES 1372091.375 0.021 0.031 -0.322581
GML GATEWAY MINING 11242151 0.013 0.019 -0.315789
TAS TASMAN RESOURCES 30178530 0.066 0.0888 -0.313382
RAG RAGNAR METALS 3447664.75 0.011 0.016 -0.3125
SUP SUPERIOR LAKE RESOURCES 27420162 0.03 0.043 -0.302326
MLS METALS AUSTRALIA 7025393.5 0.0035 0.005 -0.3
HIG HIGHLANDS PACIFIC 80862304 0.075 0.105 -0.285714
MAT MATSA RESOURCES 23883844 0.155 0.21 -0.285714
PMY PACIFICO MINERALS 8148856.5 0.004 0.007 -0.285714
CWX CARAWINE RESOURCES 10609396 0.17 0.25 -0.28
TLG TALGA RESOURCES 89337288 0.41 0.56 -0.276786
RDM RED METAL 22287132 0.105 0.145 -0.275862
ARN ALDORO RESOURCES (Listed Sep 2018) 5151125 0.145 0.20 -0.275
ENR ENCOUNTER RESOURCES 15480130 0.059 0.081 -0.271605
ALY ALCHEMY RESOURCES 6165872.5 0.013 0.0178 -0.268636
DGO DGO GOLD 18731940 0.745 1.0184 -0.268483
HLX HELIX RESOURCES 12309534 0.029 0.042 -0.261905
E25 ELEMENT 25 14273940 0.17 0.23 -0.26087
PRX PRODIGY GOLD 32682678 0.068 0.092 -0.26087
STA STRANDLINE RESOURCES 31427614 0.098 0.13 -0.246154
AOU AUROCH MINERALS 7702776 0.078 0.1 -0.22
NZC NZURI COPPER 82853536 0.275 0.345 -0.202899
AML AEON METALS 149804784 0.245 0.305 -0.196721
SFM SANTA FE MINERALS 6553691 0.09 0.11 -0.181818
GAL GALILEO MINING (Listed May 2018) 20463568 0.17 0.20 -0.15
KRX KOPPAR RESOURCES (Listed May 2018) 5556250 0.17 0.20 -0.15
ERM EMMERSON RESOURCES 28233058 0.068 0.083 -0.144578
TNG TNG 115616096 0.12 0.14 -0.142857
ZEN ZENITH ENERGY 67130000 0.64 0.75 -0.133333
FIN FIN RESOURCES 4375371.5 0.016 0.0183 -0.127273
POS POSEIDON NICKEL 110993480 0.042 0.049 -0.122449
WKT WALKABOUT RESOURCES 28903726 0.09 0.105 -0.114286
KOR KORAB RESOURCES 7671399.5 0.024 0.028 -0.107143
IAU INTREPID MINES 13785992 1.02 1.1 -0.090909
ORN ORION MINERALS 46843336 0.024 0.026 -0.076923
PAN PANORAMIC RESOURCES 182975360 0.375 0.3984 -0.058735
AMG AUSMEX MINING GROUP 28766530 0.068 0.069 -0.014493
AXE ARCHER EXPLORATION 13400000 0.07 0.13 -0.5%
AX8 ACCELERATE RESOURCES 5200000 0.11 0.195 -0.4%
A4N ALPHA HPA 56700000 0.1 0.14 -0.3%
CLZ CLASSIC MINERALS 7800000 0.003 0.004 -0.3%
CDU CUDECO (Suspended since Mar 2018) 92000000 0.235 0.31 -0.2%
CTM CENTAURUS METALS 16134875 0.0065 0.007 0%
LEG LEGEND MINING 61330524 0.032 0.03 0%
AZY ANTIPA MINERALS 37900000 0.21 0.21 0%
HAR HARANGA RESOURCES (Suspended since Jan 2018) 1500000 0.003 0.003 0%
WFE WINMAR RESOURCES 58200000 0.024 0.0045 0.0433
ACB A-CAP ENERGY 43594244 0.052 0.049 0.061225
MGU MAGNUM MINING AND EXPLORATION 18172624 0.058 0.06 0.083333
DGR DGR GLOBAL 82779552 0.13 0.115 0.130435
HIP HIPO RESOURCES 6957188 0.015 0.0147 0.160318
RDS REDSTONE RESOURCES 8375702 0.016 0.0135 0.187384
MGV MUSGRAVE MINERALS 30737948 0.095 0.079 0.189873
VMC VENUS METALS CORP 15256738 0.16 0.13 0.230769
AIV ACTIVEX 35445680 0.2 0.16 0.25
CZI CASSINI RESOURCES 30750132 0.089 0.071 0.253521
CHK COHIBA MINERALS 9969214 0.014 0.01 0.4
ANW AUS TIN MINING 33628904 0.017 0.011 0.545455
ADY ADMIRALTY RESOURCES 18465850 0.016 0.007 1.285714

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.