An Overview of Cobalt Stocksĭue to the various industrial applications of this transition metal, investing in cobalt stocks has lately been popular among hedge funds. This generates elevated geopolitical, environmental, social, and governance (ESG) risks for equity investors seeking cobalt exposure. In addition, roughly 71% of cobalt output originates from the Democratic Republic of the Congo (DRC), a nation plagued by human rights violations owing to internal wars, an undeveloped economy, and hazardous mining operations. It is challenging to locate a company that focuses only on the production of cobalt, which makes investing in cobalt stocks challenging. Typically, an electric vehicle's battery requires 9 kg of cobalt however, cell phone batteries require 30 grams of cobalt. China is the world's largest producer of electric vehicles and mobile phones. China has a significant demand for cobalt due to its application in semiconductor chips installed in consumer electrical goods such as mobile phone batteries. Cobalt is a rare metal compared to more plentiful metals such as copper, manganese, and nickel and is primarily a byproduct of nickel and copper mining.Ĭhina is home to the majority of cobalt processing facilities, despite not being a large producer. According to the United States Geological Survey (UGS), in 2021, 170,000 metric tonnes of cobalt were produced. This might be a problem for the EV sector since EV adoption is predicted to increase by 29 percent annually through 2030, indicating a favorable prognosis for cobalt stocks.Įxperts believe that industrial demand for cobalt will exceed production by 2025 since the metal's consumption is projected to increase by 9 percent annually between 20. However, the development of EVs has been hampered by the restricted availability of lithium-ion batteries. Last year, the price of this valuable metal surged by 118 percent due to government assistance for the sale and manufacturing of electric vehicles. Cobalt has become an essential component of lithium-ion batteries used for electric power vehicles (EVs) and mobile phone batteries.
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