Reduced cobalt content in electric car batteries is actually good news for investors, says Canadian player First Cobalt.

US car giant Telsa and Japanese battery maker Panasonic — which supplies batteries for Tesla’s Model 3 sedan — have said they are reducing or even phasing out the use of cobalt in their products. Other car makers are sticking with cobalt-rich batteries for the moment.

But lower cobalt content in car batteries is not necessarily a bad thing, says First Cobalt (ASX:FCC).

“Assertions that cobalt could soon be eliminated altogether from electric vehicles are simply wrong,” First Cobalt chief Trent Mell said in a letter to shareholders this week.

“We are indeed moving towards an era of lower cobalt content per vehicle, but this has positive implications for cobalt producers as it lowers the price of the battery packs which in turn will accelerate mass adoption of EVs [electric vehicles] over combustion engines.”

Cobalt is mainly used to make the cathode in lithium-ion batteries.

>> Scroll down for a list of ASX stocks with cobalt exposure, thanks to ASX resources data provider MakCorp.

The global fleet of electric vehicles grew 54 per cent in 2017, however this only represents a little over 1 per cent of global vehicle sales.

“The electric vehicle revolution is still in its infancy, yet cobalt production is in a deficit position and is projected to remain there for several years,” Mr Mell said.

Battery metal price analyst Benchmark Mineral Intelligence predicts cobalt density in electric cars will decrease by 60 per cent between 2017 and 2026 but total cobalt demand will increase more than 300 per cent as more people opt for electric vehicles.

“Miners are now playing catch up and success will come to the first movers who have the right team, in the right jurisdiction, with the right assets,” Mr Mell said.

In the past year, four companies have merged to form First Cobalt — a vertically integrated, North American cobalt pure-play.

First Cobalt made its debut on the ASX in December following an all-scrip merger with Australian junior Cobalt One.

The company, which has an ASX market value of about $250 million, has projects in Idaho and Ontario.

First Cobalt controls almost half of the historic Canadian “Cobalt Camp”, with more than 50 past producing mines over 100 square kilometres.

The company says it also owns the only permitted cobalt refinery in North America capable of producing battery materials.

Cobalt stocks continue to be a hit with investors.

Here’s a list of ASX stocks with exposure to cobalt. (Scroll or swipe for full table)

ASX code Company One-year price change Price Jun 6 (intraday) Market Cap
WFE WINMAR RESOURCES 11 0.024 58.2M
AUZ AUSTRALIAN MINES 7.72727272727 0.096 259.7M
JRV JERVOIS MINING 5.34615384615 0.33 72.4M
COB COBALT BLUE HOLD 5.07692307692 1.185 136.7M
CLA CELSIUS RESOURCE 4.40540540541 0.2 145.9M
CLL COLLERINA COBALT 3.4 0.11 61.9M
RIE RIEDEL RESOURCES 3.05882352941 0.069 29.3M
TAR TARUGA GOLD 2.8679245283 0.205 24.7M
BPL BROKEN HILL PROS 2.5 0.105 16.3M
PAN PANORAMIC RESOUR 1.9702970297 0.6 299.9M
CCZ CASTILLO COPPER 1.66666666667 0.04 23.8M
HIG HIGHLANDS PAC 1.45454545455 0.135 142.1M
AXE ARCHER EXPLORATI 1.44444444444 0.11 21.0M
AML AEON METALS 1.4 0.36 216.8M
NWC NEW WORLD COBALT 1.30555555556 0.083 37.3M
HGM HIGH GRADE METAL 1.29166666667 0.055 24.0M
GME GME RESOURCES 1.22222222222 0.14 65.4M
MQR MARQUEE RESOURCE 1.16666666667 0.39 14.7M
BDI BLINA MINERALS 1 0.002 4.3M
AYR ALLOY RESOURCES 1 0.008 10.2M
ANW AUS TIN MINING 1 0.016 31.4M
ZNC ZENITH MINERALS 0.947368421053 0.185 41.5M
OKR OKAPI RESOURCES (listed Sep 2017) 0.9 0.38 13.4M
ARL ARDEA RESOURCES 0.875 0.975 103.4M
CLQ CLEAN TEQ HOLDIN 0.813559322034 1.07 812.9M
KOR KORAB RESOURCES 0.571428571429 0.033 10.6M
SGQ ST GEORGE MINING 0.541666666667 0.185 47.4M
CAZ CAZALY RESOURCES 0.463414634146 0.06
NZC NZURI COPPER 0.457142857143 0.255 68.9M
LRS LATIN RESOURCES 0.4 0.007 21.0M
N27 NORTHERN COBALT (listed Sep 2017) 0.325 0.265 13.3M
FEL FE 0.25 0.025 10.0M
BSX BLACKSTONE MINER 0.225 0.245 24.1M
EUC EUROPEAN COBALT 0.190476190476 0.075 60.2M
PIO PIONEER RESOURCE 0.176470588235 0.02 29.0M
MEI METEORIC RESOURC 0.129032258065 0.035 19.5M
CZI CASSINI RESOURCE 0.0793650793651 0.068 19.1M
CNJ CONICO 0.0697674418605 0.046 14.9M
WCN WHITE CLIFF MINE 0 0.003 7.7M
VML VITAL METALS 0 0.01 16.5M
CFE CAPEAMBERT RES 0 0.032 30.9M
VIC VICTORY MINES -0.0769230769231 0.012 14.7M
MLM METALLICA MINRAL -0.0980392156863 0.046 15.5M
PGM PLATINA RESOURCE -0.10752688172 0.083 21.7M
MRR MINREX RESOURCES -0.166666666667 0.055 4.5M
CDU CUDECO (suspended) -0.175438596491 0.235 91.7M
BAR BARRA RESOURCES -0.183333333333 0.049 24.2M
BMT BERKUT MINERALS -0.205882352941 0.135 7.3M
HMX HAMMER METALS -0.309523809524 0.029 7.8M
HAV HAVILAH RESOURCE -0.336283185841 0.225 45.8M
MTC METALSTECH -0.342105263158 0.125 15.0M
TKM TREK METALS -0.354838709677 0.02 6.2M
CZN CORAZON MINING -0.411764705882 0.01 12.7M
CGM COUGAR METALS -0.428571428571 0.004 5.5M
AZI ALTA ZINC -0.428571428571 0.008 9.6M
FCC FIRST COBALT -0.470588235294 0.765 78.1M
THX THUNDELARRA -0.583333333333 0.02 12.7M
MTH MITHRIL RESOURCE -0.65 0.014 2.0M
RMX RED MOUNTAIN MIN -0.653846153846 0.009 6.8M

 

In the past year well over half of the ASX-listed stocks with exposure to cobalt have made gains and at least 20 have realised significant share price hikes of double or more.

The biggest gainer is Winmar Resources (ASX:WFE), which has seen its share price rocket 1100 per cent to 2.4c.

Investors piled into the company earlier this year after it raised $3.1 million to buy cobalt projects in the Congo.

Australian Mines (ASX:AUZ) has added around 773 per cent to its share price in the past year to trade at 9.6c, while Jervois Mining (ASX:JRV) and Cobalt Blue Holdings (ASX:COB) have jumped more than 500 per cent to 33c and a $1.19 respectively.

Taruga Gold (ASX:TAR), which has cobalt projects in the DRC, is up nearly 290 per cent.

The company said this week that it has received “firm commitments” from a group of sophisticated investors, including China’s Hongze Group, for a placement to raise $2.8 million.

The Hongze Group is also an investor in Klaus Eckhof’s Okapi Resources (ASX:OKR), which is also on the hunt for cobalt in the DRC.

 

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.

MakCorp logo

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