Chile's door to electric vehicle industry
In the wake of the world's growing electric vehicle (EV) market, one sought after commodity proving to be quite valuable is cobalt, one of the main components needed in the newest generation of rechargeable batteries being used in these vehicles.
The metallic element, which has seen its price jump some 400% in the last year, is creating a niche market for mining companies and investors who normally focus on other high demand elements such as copper and lithium.
With the popularity of Tesla and promises by a number of other automobile manufacturers planning to make their entire fleet at least partially electric within the next few years, the demand for cobalt will likely be strong for at least the next decade.
Besides being one of the most recent targets of Australian mining mogul Mark Creasy, precious metals expert Dana Kallasch who is the co-founder of Zurich-based Commodity Capital says that "Cobalt is the next big thing," according to a Bloomberg report.
This will certainly call attention to governments as well as exploration companies and resource managers.
FROM CONGO TO CHILE?
Despite more than half of the global production of Cobalt coming from the Democratic Republic of Congo (66,000t in 2016), much of it is extracted in an informal way which commonly involves child labor, the report said.
As such, this will open the door up to other countries such as Chile which use more formal processes of extraction.
Currently, the South American country - in partnership with multinationals - is on a mission to resume large-scale cobalt production for the first time in decades.
The country's development agency Corfo is in talks with Samsung SDI and Umicore regarding the extraction and use of cobalt as well as lithium. The agency is also working on a plan with China's Baic group in terms of overall EV production.
Meanwhile in Congo, Canadian mining company First Cobalt has shut down business with the African nation and intends to wrap up its merger with Australia's Cobalt One and Canada's CobalTech Mining by the end of the year. This should result in the world's largest mining group.
Although the city of Cobalt in Ontario looks to be the main focus of the group's business, First Cobalt has not ruled out exploration in other countries.
In Chile, a 1944 document reporting on cobalt extracted in the country from 1844-1941 showed that the quality of the local mineral was more than twice that of Congo's current production average, according to Corfo.
The agency is currently conducting studies to determine how much cobalt the country actually has and intends to divulge the information to the private sector once the studies are completed. The 60-day study should be wrapped up by the end of October.