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Cobalt Resources

Cobalt is indispensable for a number of growing high tech applications including high performance lithium ion batteries and super alloys. The majority of world cobalt reserves are located in the African Copper Belt in the Democratic Republic of the Congo (DRC) and Zambia. Approximately 65% of the world cobalt supply is mined from the DRC. Following the Washington Post article in September 2016 the industry using DRC sourced cobalt is under pressure. Australia, Canada, Cuba, Zambia, New Caledonia, Russia and the Phillipines hold much of the balance of global cobalt reserves being mined as a copper and nickel by-product. As of 2014, the world production of cobalt was 123.000 mt.

Cobalt generally occurs in primary copper / nickel sulphide deposits (carrollite, skutterudite, cobaltite) or nickel-bearing laterites (asbolane, heterogenite). This means that cobalt is usually produced as a by-product of copper and nickel mining activities thus heavily dependent on the price regime and economics of these metals. Of current production sources, approximately 55% of cobalt production is copper related, 42% is nickel related and only 3% are being produced by primary cobalt operations. Due to the significant growth in cobalt consumption from the battery sector and the imbalance of cobalt output from copper and nickel mines not meeting actual demand, at the current supply situation future shortages are expected.

This presents an interesting opportunity for junior mining companies to develop new cobalt resources with a focus on developing single play, high grading and primary cobalt resources.