![]() Therefore, in order to bring new sources of cobalt supply to the market, it will require economics that can support these operations and an acceptable return to the investor. If a resource is developed to bring cobalt production on, the incentive price for nickel or copper will have to support the investment because that is the economic driver. ![]() However, it is important to note that cobalt supply is closely tied to copper and nickel production. We believe current and future production is not capped at that 100,000 tonne mark. There are untapped resources and there is further room to potentially increase production. They predicted significant shortages and stressed the likelihood of cobalt eventually being sidelined. This was obviously not the case because in 2017, cobalt production surpassed 100,000 tonnes per year to keep pace with demand. In 2008, the global cobalt supply/demand market was approximately 50,000 tonnes per year, with China not yet a significant player. At that time, a number of industry commentators were particularly vocal in their skepticism that cobalt supply could meet the demand being created by cellphones, camcorders and laptop computers (collectively referred to as the three C’s). Despite its high price, cobalt was not engineered out of phone batteries nor did it curb our appetite for what has become the standard technology for personal communications across the globe. In fact, while there were some attempts to reduce its content in consumer electronics batteries, cobalt demand actually increased. Just ten years ago, in 2008, cobalt hit US$50 per pound thanks to the birth and rapid spread of the smartphone. While it’s true that cobalt’s meteoric rise has caused everyone to take a hard look at supply and demand fundamentals, we need to take a step back and realize that this is hardly the first time that cobalt has significantly appreciated in value. Historically, whenever a commodity appreciates to all-time highs, pundits and naysayers are quick to forecast its eventual demise. Having tripled in value within two years, cobalt is now (once again I may add) being subjected to that same sentiment. However, despite the cobalt obituaries, there is an undeniable reality here: while battery manufacturers are indeed optimizing their chemistries, research suggests there simply isn’t an easy solution to eliminating cobalt from a lithium ion cell without a trade-off, such as performance or safety. Combine this with projected growth in other sectors that utilize cobalt (think jet engines and magnets that provide the electric motors for our new EVs) and forecasted demand for cobalt is as robust as it has been for many years, if ever. (TSXv: KBLT), a battery metals streaming and royalty company offering direct exposure to cobalt and nickel, integral elements in key technologies of electric vehicles and energy storage systems. Martin Vydra, Head of Strategy, Cobalt 27 Capital Corp.
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