When it comes to metals trading, most novice investors might focus all their attention on metals like gold, platinum, and silver. Though certainly profitable resources to invest in, any metals trader can tell you that all the metals in the periodic table can be profitable if you know how to invest in them properly.
Cobalt is one example. The main resource required in the production of lithium-ion batteries, its profit potential becomes apparent when you consider the shift towards electric vehicles going on around the world.
Investors, as a result, have adopted a positive outlook on the demand for the metal, with many experts anticipating the industrial demand for cobalt to surpass its production by 2025, as the demand for the metal is expected to compound by 9% annually between 2020 and 2026.
And since cobalt is not as abundant as other metals, getting a foothold financially in the industry is important if you intend to hold a profitable position later on. That’s why, in this article, we’ve listed down the top 10 cobalt stocks we’ve been watching so far into 2022:
1. Glencore plc (OTC: GLNCY)
Market Value: 70.17 Billion British Pounds
With mining operations in mines in Australia, Canada, the Democratic Republic of Congo, and Norway, Glencore is one of the largest producers of cobalt in the world. In the year 2021, alone, the company achieved annual production of 25,320 metric tons, accounting for 16% of the global cobalt production.
On top of that, the company also has plans to expand its nickel production with a recent partnership with Electra Battery Materials, Talon Metals, and the Government of Ontario. This, along with several ongoing lithium battery recycling partnerships in the works, Glencore is in one of the best positions to profit from an increase in demand for electric vehicles.
In the past 6 months, the company saw increases in its shares amounting to 30.28%. As a long-term investment, traders might be pleased to know that the stocks have gained by 76.34% over the past 5 years and over 35% over 12 months.
In April 2022, General Motors Company, one of the leading producers of automotive vehicles, struck a deal with Glencore to buy its cobalt for the production of Electric Vehicles. Investment in this company is essentially a bet on the fruitfulness of all these deals in the future.
2. China Molybdenum Co., Ltd. (HKSE: 3993.HK)
Market Value: N/A
This is a partially state-owned enterprise that produced almost 15,000 tons of cobalt in 2021. Its most notable holding is an 80% interest in the Tenke Fugurume mine in the Democratic Republic of Congo, the world’s leading producer of cobalt.
Intending to double cobalt production, along with copper and nickel, the company has resolved to invest 2.5 billion dollars in the Tenke Fugurume mine, to be used for deeper explorations and more technologically advanced mining techniques.
As the largest producer of cobalt in China, revenues for Molybdenum increased by 53.9% year on year to $27.32 billion. Meanwhile, earnings also increased by 119% year on year to $803 million.
With China looking to have half of all its vehicles turned electric within the next two decades and already being the largest producer of electric vehicles in the world, this company is likely to profit from future developments in the cobalt and EV industry.
3. Zhejiang Huayou Cobalt Co., Ltd (SSE: 603799.SS)
Market Value: $129.74 Billion
Another China-based company, this company produced over 5,000 tons of cobalt in 2021. And more than simply producing and procession cobalt, Zhejiang is heavily involved in the research, development, and manufacturing of cobalt-related products and lithium battery materials. This puts them at the forefront of electric vehicle and battery technology.
Shares for the company have proven to be resilient given the recent effects of the pandemic, posting increases of over 19% in the past 12 months.
4. Vale S.A. (NYSE: VALE)
Market Value: $84.15 Billion
Based in Brazil, Vale S.A. is one of the more well-known mining giants with stakes in many metals, not just cobalt. In 2021, the company produced over 2,000 metric tons of cobalt through various global operations, a marked 6% increase from its production the year prior.
It also engaged in refinery and recycling, expanding the areas where the company can benefit from the expected rise in demand for the metal.
With expectations for the production of cobalt to last until the early 2040s, there are a good two decades left for investors to capitalize on.
On other fronts, the company secured a multi-year agreement in March with Northvolt AB to supply low-carbon nickel products. It has also invested heavily in the construction of 2 other plants to get a foothold in the production of green pig iron.
All these developments hint at the company’s intention to become the main supplier of choice for the electric vehicle industry in the coming years.
5. Panoramic Resources Limited (OTC: PANRF)
Market Value: $384.648 Million
An Australian mining and exploration company that’s relatively new to the cobalt mining game by industry standards, the company has recently accomplished its third shipment of copper-cobalt-nickel concentrate since commencing production from its Savannah nickel project in Western Australia in 2021.
Though not a direct competitor in the industry, the company stands just as much chance of benefiting from the demand for cobalt as any of the larger companies.
The company already aligned a streaming partner in the form of Jinchuan, who will receive the concentrate and will be accepting a payment of $22 million against the shipment. On top of that, it has 2 more shipments to China scheduled and an estimated reserve of 209,800 metric tons of nickel and 13,700 metric tons of cobalt.
6. Jervois Global Limited (OTC: JRVMF)
Market Value: $721.881 Million
Another Australian mining company, Jervois Global Limited acquired the Idaho Cobalt Operations (ICO) in 2019 and now intends to start commercial production from the facility by the end of this year.
It is considered to be one of the world leaders in ethically-sourced cobalt.
It also has exposure to Brazilian mining companies which have refineries that offer an annual cobalt production of 2,000 metric tons in 2021.
7. Umicore SA (OTC: UMICY)
Market Value: 9.79 Billion Euros
This Belgium-based mining company has the distinction of being of the few currently working towards developing recyclable lithium-ion batteries. Should their efforts prove fruitful, Umicore SA might unlock the key to a renewable supply of battery materials for the electric vehicle market.
On top of that, the company is revolutionizing the industry with the introduction of blockchain technology into its operations.
Furthermore, Umicore has an increasingly diverse portfolio that includes copper, iridium, lithium, molybdenum, and selenium mining projects. The company is considered an acquisition target for the South Korean LG Chem as it is looking to enhance the size of its battery materials business.
8. Wheaton Precious Metals Corp. (NYSE: WPM)
Market Value: $19.07 Billion
Based in Canada, Wheaton Precious Metals Corp. is one of the largest companies on this list. The metals streaming company has agreements with 23 operating mines and 13 mines that are in the development stage. As such, investors are taking a very bullish stance on the stocks of this company.
Going into 2022, the company boasted a strong start with $305 million in revenue and an operating cash flow of $210 million for the first quarter. It also has a net cash balance that stands at $376 million as of March 31.
9. Sherritt International Corp. (SG: HRT.SG)
Market Value: N/A
This Canadian company is using unprecedented advanced hydrometallurgical techniques to refine cobalt and nickel. On top of that, the company is also one of the top energy producers in Cuba.
For many investors, the company represents an ideal investment for those looking for an environmentally, socially, and culturally responsible company. Sherritt International Corp. publishes ESG reports at regular intervals.
Though still considered to be quite small, the company grew by $58.5 million, an increase of 94% year on year. This, along with a stable income flow from Cuba, makes it a stable option as well.
10. Carpenter Technology Corporation (NYSE: CRS)
Market Value: $1.56 Billion
This company is the leading producer of premium specialty alloys like nickel that has applications in the aerospace, defense, consumer end-use markets, and transportation industries.
At the beginning of this year, stocks of the company gained nearly 19% as compared to the broader market’s decline of 14.5% during the same period. Compounded with that is the fact that the company surpassed the revenue forecast by $73.3 million in the first quarter.
Many investors and analysts have taken a bullish stance on the company as a result.
And that was our list of the top top 10 cobalt stocks we’re watching in 2022. Though there are no guarantees when it comes to the stock market, there are always opportunities for a smart and well-researched investor like you can capitalize on.
Cobalt is a metal that presents one such opportunity. If played right, the stocks of the company that deals with cobalt can be as good as gold in the near future.