From the next year or so and into the foreseeable future, cobalt consumption growth is expected to overtake production as Electric Vehicle (EV) sales sustain a growth trajectory, providing cobalt producers, especially those serving burgeoning EV and green energy markets in North America and Europe, with plenty of optimism.
This growth is set to come after several years of global supply outpacing demand, primarily due to large-scale brownfield and greenfield project expansions in the world’s largest producer, the Democratic Republic of Congo (DRC).
Leading industry consultant Benchmark Minerals Intelligence (BMI) has an improved outlook for the cobalt market. Previously, BMI forecast market surpluses in 2024 and 2025 of around 6% of total cobalt demand but has cut that level by half to around 3%.
Deficit looming
Importantly, BMI now expects a market balance in 2026 before moving into a significant deficit in 2027. Key factors behind the changes are price-related cuts to mined output estimates, stockpiling of physical cobalt and sustained EV demand.
Global Cobalt Supply and Demand, 2015–2030. Source: Benchmark Minerals Intelligence, Cobalt Blue.
According to GlobalData, Australia was the world’s fifth-largest producer of cobalt in 2023. Although output was down by 20.1% on 2022, over the five years to 2022, production from Australia increased by a CAGR of 4% and is expected to rise by a CAGR of 18% between 2023 and 2027.
Australia accounts for 2% of global production but holds around 15.5% of global reserves, with the largest producers being the DRC with about 74%, Indonesia, Russia and Madagascar.
Leading producers in Australia are Glencore (LON:GLEN) and BHP (ASX:BHP). During 2020-2021, Glencore's output was up by 20%, BHP's output decreased by 38%. The largest operation, which produces around 50% of the country’s cobalt, is Glencore’s Murrin Murrin nickel-cobalt mine in the NE Goldfields of Western Australia. In 2022 it produced about 35,700 tonnes of nickel and 3,000 tonnes of cobalt as a by-product.
Around 130,000 tonnes of cobalt are annually exported from the DRC, compared to Australia’s exports of 6,000 tonnes, providing an indication of its dominance. While the DRC’s labour and mining practices are often labelled unethical and unsustainable, Australian miners are focused on safer, more environmentally friendly practices, which is of appeal in North America and the EU.
Cobalt is a critical mineral
Cobalt is seen as a linchpin in the transition to a low-carbon economy with global EV sales continuing to register strong growth. According to Rho Motion, 7 million EVs were sold globally in the first half of 2024, a rise of 20% vs 2023.
China led the market with sales rising 31%, followed by India (+20%). Meanwhile, the US grew by 10% in the same period, Europe by just 2% and sales in Japan fell by 9%. As the market matures, growth in the USA and Europe is expected to outpace China’s in the second half of this decade.
The majority of existing and future supply is highly concentrated with concerns over responsible sourcing from mined production and supply security among processing supply.
Global EV sales and cobalt demand in EV batteries, 2018–2030. Source Rho Motion, Cobalt Blue.
The Australian Government is enthusiastic about the country’s move toward mining critical minerals, establishing a Critical Minerals Facilitation Office in January 2020 as part of a push for this minerals sector. The element is also a critical mineral in North America and Europe.
According to the Australian Government’s Critical Minerals Strategy 2023-2030, demand for cobalt could rise by 20 times by 2040, which means the country has the potential to scale up cobalt production slowly and sustainably, situating itself as a major world player.
About cobalt
Cobalt provides lithium-ion batteries with superior energy density and thermal stability. Famed for its striking blue pigment, cobalt blue, cobalt as an element has evolved from being a thing of beauty to a vital technology enabler.
It was officially discovered as an element in 1742 by Swedish chemist Georg Brandt and in the early 20th century, the primary application began shifting from cosmetic purposes to technological pursuits.
Cobalt is mainly found in compounds, such as cobalt arsenide, cobalt sulpharsenide and hydrated arsenate, and has been predominantly used for alloy production, including for gas turbine engines and magnets. It is also found in robust cobalt alloys used to cut and drill steel, like tungsten carbide and chromium-cobalt.
Generally, cobalt does not come from cobalt mines with 98% produced as a by-product of nickel and copper mining. Copper mines account for about 60% of global cobalt output and nickel mines around 38%.
Between the exploding EV market and the continued trend toward electronics sales, digitization and green energy, cobalt will likely remain a hot commodity in the mining world for years to come.
Cobalt at IMARC
Discussion of a landmark study of cobalt markets will be a focus for Cobalt Institute director general Dinah McLeod when she makes her first visit to the IMARC conference and exhibition in Sydney from October 29-31 this year.
Heading a line-up of international critical minerals experts and leaders on the IMARC 2024 program, McLeod says a Cobalt 2050 study produced with support from the institute’s 57 members will be a feature of her Energy Transition and Decarbonisation stream keynote.
“Our members realise cobalt is part of the solution to achieving the energy transition,” she said. “This first of its kind study for one of the key energy transition metals takes a deep dive into the potential of cobalt to help reach climate neutrality and speaks to the cobalt industry’s acknowledgement of its responsibility to help achieve energy transition and do so in a sustainable and responsible manner.
“As the world needs more cobalt to power EV batteries, Australia will play an increasingly important role in cobalt mining. More importantly, Australia can also explore its potential to build a domestic cobalt value chain which will help secure cobalt supplies for the country and its strategic partners, such as the US and the EU.”
She said the growing global cobalt market was being reshaped by EV battery use which accounted for 73% of demand for the metal and was the dominant driver of market growth.
Total demand hit 200,000 tonnes for the first time in 2023 and is being forecast by some to double by 2030. A 2020 World Bank report put out a longer-range forecast for energy technologies-led cobalt demand to reach 644,000 tonnes by 2050.
Primary cobalt supply is expected to track up to nearly 300,000 tonnes by 2030, with more favourable cobalt pricing dynamics seen as likely to emerge from the middle of this decade.
Role in circular economy
IMARC will also put a spotlight on circular economy solutions within the mining sector and highlight the important role of cobalt in driving the energy transition.
Another speaker will be Alan Young, Toronto-based director of the Materials Efficiency Research Group. He said mining and metals circularity, along with critical social pacts could help miners unlock valuable resources faster.
“What we’ll be talking about in Sydney is the immense business opportunity that comes when you treat waste as a resource and partnership as an asset,” Young said.
Cobalt Blue’s Helen Degeling, another headline IMARC 2024 speaker, agrees. "It’s a critical discussion … and then having people talk about real solutions is key,” she says. “It’s not just a conversation that’s up in the clouds. The live and lived examples are hopefully going to change the industry’s ESG credentials.”
Cobalt Blue at forefront
A key to Australia’s success in its critical minerals portfolio is the ability to value-add or refine resources rather than simply shipping them in dry bulk. This approach also applies to cobalt, with many of Australia’s premier miners and producers looking to enter the market further downstream with improved products and Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is at the forefront when it comes to cobalt.
A pure-play cobalt company, Cobalt Blue has a three-pronged supply strategy incorporating the Broken Hill Cobalt Project (BHCP) in Far West NSW, a Cobalt-Nickel Refinery planned for Kwinana in WA and ReMine+, an initiative using COB’s patented technology to produce cobalt and other minerals from mine waste.
At the BHCP at Broken Hill, the company is continuing a strategic review, progressing test work at lab and demo scale focused on its Demonstration Plant, and is involved in offtake discussions.
READ: Cobalt Blue appoints global engineering leader Tetra Tech for Cobalt-Nickel Refinery
The company has a pathway to near-term construction at the Cobalt-Nickel Refinery, including:
- Iwatani partnership negotiations;
- Feedstock agreement negotiations;
- Offtake agreement negotiations;
- Technical and site studies underway;
- Funding (domestic and international agencies); and
- FID expected 3Q24.
The ReMine+ program also represents global opportunities for Cobalt Blue using its patented processing technology to extract valuable minerals from mine waste.
READ: Cobalt Blue transforming mine waste problem into ReMine+ solution
Opportunities in this program include:
- Flin Flon Mine, Canada;
- Large-scale test work;
- Commercial partner negotiations;
- Australian opportunities;
- Partnering with government test work;
- Commercial negotiations with existing producers;
- European Raw Materials Alliance (ERMA); and
- Ongoing evaluation of other opportunities.
Corazon Mining
Corazon Mining Ltd (ASX:CZN, OTC:CRZNF) has cobalt potential at its Lynn Lake Nickel-Copper-Cobalt Sulphide Project in Manitoba, Canada, and at the Mt Gilmore Cobalt-Copper-Gold Project in northeast New South Wales.
Lynn Lake was successfully mined for 24 years before it was closed in 1976. The ore was historically processed via conventional flotation, which delivered very good recoveries for nickel, copper and cobalt.
Corazon has since achieved improved recoveries and concentrate grades compared to those historically reported and ore-upgrading presents the potential to reduce costs and increase reserves of a future mining operation.
There are 80% of the current resources in the measured or indicated JORC category with total contained metal of 116,800 tonnes of nickel, 54,300 tonnes of copper and 5,300 tonnes of cobalt.
READ: Corazon Mining acquiring strategic high-grade zinc-copper-gold deposits near Lynn Lake
New high-grade zinc-copper-gold deposits provide the potential to transform Lynn Lake into a regional polymetallic processing hub.
Corazon recently entered into an agreement for the acquisition of three drill-defined zinc-copper-gold deposits, near Lynn Lake and which add to the existing portfolio of seven zinc-copper-gold deposits within the 100% owned project.
Mining studies and metallurgical test work programs are continuing for the historical mining centre.
Excellent results to date have led to an extension of the metallurgical test work program and the current phase of studies, including detailed mine design and scheduling, is anticipated to be completed this quarter.
At Mt Gilmore, exploration of the prospective Mt Gilmore trend uncovered a major copper-cobalt-silver-gold geochemical trend, potentially representing a district-scale exploration play for large intrusive related copper-cobalt-gold deposits.
READ: Corazon Mining identifies large high-priority copper-gold target at Mt Gilmore
This year, the company has defined the large-scale May Queen porphyry copper-gold drilling target by combining Corazon’s exploration datasets with a recently completed mineral chemistry vectoring study undertaken by the University of Tasmania’s (UTAS), Centre of Ore Deposit and Earth Sciences (CODES).
The CODES/UTAS geochemical targeting program has been highly effective and has delivered positive results, which established May Queen as a high-priority target and Corazon is planning a maiden drilling program.
As a first step in the planning process, the company will continue its engagement with landowners in the project area, as well as with regional stakeholders and plans to begin drilling at the target as a key priority upon granting of all requisite approvals for drilling.
Sipa Resources
Cobalt and nickel mineralisation was identified in September 2023 by Sipa Resources Ltd (ASX:SRI) at the 100%-owned Skeleton Rocks Project in Western Australia.
Drilling by Sipa on the Nicoletti Trend returned anomalous nickel and cobalt in several holes with better results including:
- 16 metres at 0.4% nickel, 287ppm cobalt and 1.7% chromium; and
- 12 metres at 0.3% nickel, 200ppm cobalt and 0.5% chromium.
During the June quarter of 2024, a detailed review of historical data derived from previous explorers was undertaken, which confirmed the prospectivity of the project.
As a result, the company is planning to undertake aircore drilling once the cropping season has been completed, likely to be late November/early December. The planned aircore drilling will test to the east and west of the previous Sipa drilling, with a series of north-south traverses.
Access agreements are already completed for key areas, with discussions progressing on others.
Boadicea Resources
Another company pursuing a critical minerals strategy is Boadicea Resources with cobalt identified at the Transline North and Transline South JV projects in IGO Ltd in WA’s Fraser Range.
READ: Boadicea Resources Fraser Range tenements show promising nickel-copper-cobalt prospects
Ballast NE prospect at the north project and Eggpie prospect at the south project have been shown by IGO to contain promising nickel-copper-cobalt mineralisation.
IGO has completed a geochemical analysis of the assays from drilling over the large Ballast magnetic 'eye' feature at Ballast NE and the Eggpie prospect and will conduct ground electromagnetic surveys to identify potential nickel-copper-cobalt sulphide accumulations.
Massive sulphides in mafic-ultramafic intrusions in the Fraser Range are the host rocks for nickel, zinc, copper and cobalt mineralisation which are highly conductive and Boadicea is also exploring for these critical minerals on its 100%-owned tenements in the region.
Anson Resources
One of the critical metals projects of Anson Resources is the Hooley Well Nickel-Cobalt Laterite Project, 800 kilometres north of Perth and 300 kilometres northeast of Geraldton in Western Australia.
Historical shallow drilling at two of the three tenements intersected nickel and cobalt laterites, which are also possible primary nickel sulphides (identified by IP response) at depth.
Earlier this year Anson completed a first-pass sampling program at the project and given the successful outcomes, is planning to undertake the following fieldwork:
- Organising heritage surveys to be carried out in order for future exploration programs to commence;
- Shallow RC drilling to target high-priority targets identified from surface assay results proximal to Erong Hill;
- Further systematic RC drilling in areas exhibiting strong magnetic responses and IP resistivity proximal to fracture or fault margins along the Yilgarn Craton, designed to target an economic nickel-chromium laterite oxide-style deposit; and
- Shallow reconnaissance aircore drilling to target the REE anomalies close to surface.
Celsius Resources
Celsius Resources Ltd (ASX:CLA, AIM:CLA) has a 95% interest in the Opuwo Cobalt-Copper Project in Namibia, which is held by the company’s Namibian subsidiary Opuwo Cobalt Holdings (Pty) Ltd.
The company has initiated draft non-binding agreements for a potential transaction with a strategic partner/s for the disposal of its 95% interest in this project, which is 730 kilometres northwest of the Namibian capital city, Windhoek.