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Highlights
- Share of Cobalt Blue Holdings Limited are trading near their one-year high on the ASX.
- Escalating sanctions on Russian commodities seem to have taken price of Cobalt higher.
- Cobalt Blue’s Australian cobalt sulphate is becoming a strong alternative to African and Russian supplies.
Australian Cobalt explorer and developer, Cobalt Blue Holdings Limited’s (ASX:COB) shares seem to be attracting investor attention on the ASX recently. COB share price is trading near its 52-week high price on the ASX and trading volumes in March appear higher in comparison to previous periods. Possible reasons for the peaking interest are the escalating number of sanctions on Russian commodities and the increasing interest of cobalt users towards Australia.
Can Australian Cobalt replace Russian supply?
As per reports, Russia had last year produced over 4% of world’s total Cobalt supply. Though Democratic Republic of Congo dominates the Cobalt market on the supply side, Russia is the second largest. Next in line is Australia and with increasing number of sanctions on Russian commodities, the western world seems to be now looking towards Australia for the supplies.
The battery metal has strong demand from producers of Electric Vehicle batteries and high-power magnets and reportedly, Australia contains about 16% of global cobalt resources. Though not recovered directly from the mine, Cobalt is extracted alongside other in-demand metals like nickel and Copper. Also, global research predicts that the next decade is to witness a spike in Australian cobalt production. Moreover, despite Australia being the globe’s third largest cobalt producer, it has the second largest reserves of cobalt, reflecting on its potential to scale up production.
As Russia-Ukraine War Intensifies, Commodities Also Soars
Cobalt Blue’s Broken Hill cobalt project
One of the notable cobalt projects in Australia is the Broken Hill cobalt project (BHCP), owned by Cobalt Blue Holdings Limited. The project emphasises on cobalt production directly on site, rather than being extracted as a by-product of nickel. Also since, Broken Hill produces and refines its cobalt it reportedly makes production sustainable, giving it an edge over the African produce. Broken Hill’s cobalt site also expects sulphur output which has potential to hike up the project’s value.
As claimed by Cobalt Blue, more than 30 of the world’s largest battery manufacturers are looking towards the BHCP produce as the operation is large-scale and low-cost cobalt production facility. Also, unique mineralogical composition distinguishes BHCP deposits from the Cobalt laterite, Cobalt - PGE and Copper - Cobalt sulphide deposits, that are about 98% of global cobalt production.
Cobalt Blue’s share price performance
While Cobalt Blue’s BHCP is still loss making, increasing approval from battery manufacturers for its produce seems to be reflecting on COB share price too. As on Monday, 14 March 2022, 11 AM AEDT COB shares were trading on the ASX at AU$0.715 per share, up slightly above previous close. Meanwhile in the last three months of trade on the ASX COB share price has gained over 60% and over 80% in a year.
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