As Cobalt Blue readies itself to become a cobalt producer, investors are flocking to the emerging miner.
The company’s share price has jumped 170 per cent in the last six months and was nudging $0.90 at the time of writing – its highest figure since June 2018.
So what’s the stimulant?
The cobalt price is on the rise. The London Metal Exchange (LME) had three-month cobalt trading at $US82,000 ($109,920) per tonne on Wednesday. Trading Economics indicated the same price, which represents a 56 per cent increase year-on-year.
Cobalt is a prized commodity and one proving increasingly important to the electric vehicle (EV) movement.
The world’s second-largest cobalt producer has been taken out of the game in Russia. According to data from the United States Geological Survey (USGS), it is estimated Russia produced 7600 tonnes of cobalt in 2021.
This is a far cry from Congo, which is estimated to have produced 120,000 tonnes of cobalt in 2021. S&P Global forecasts Congo will increase its output to 131,262 tonnes in 2022.
Despite this, having such a large reliance on the one jurisdiction doesn’t bode well for market stability.
At the same time, Cobalt Blue continues to advance its Broken Hill cobalt project in New South Wales.
In early March, the project achieved Major Project Status through the Federal Government. This recognises the economic significance of the project through its contribution to growth, productivity, government revenue, industry and regional development.
Broken Hill’s pilot plant successfully produced cobalt sulphate samples in October 2021, and with a host of parties eager to receive samples Cobalt Blue will transition the pilot plant to a demonstration plant in 2022.
With construction and commissioning underway at the demonstration plant, Cobalt Blue is aiming for first ore processing in late April.
The Broken Hill project will produce 16,700 tonnes of high-purity cobalt sulphate per year once up and running.
Cobalt Blue has also established an MoU with the Queensland Government to explore opportunities in the recovery of cobalt (and any co-existing base and precious metals) from mine waste.
Cobalt Blue chief executive officer Joe Kaderavek said that while Australia’s cobalt potential is well realised in the ground (16 per cent of the world’s cobalt reserves), it’s also significantly untapped in waste.
“In waste, we have significant quantities of cobalt. For example, in Queensland there is approximately 300,000 tonnes of cobalt sitting at-surface in tailings dams, in waste streams,” he told Australian Resources & Investment.
“So, typically, 40- or 50-metre depth, easy to extract – it’s already been mined, it’s already been ground – so the processing costs are a fraction.”
As cobalt becomes increasingly sought after, the Broken Hill project is going to become increasingly important on a global scale. This only bodes well for Cobalt Blue moving forward.