How To Invest in Cobalt, One of the Worlds Most Valuable Resources

How To Invest in Cobalt, One of the Worlds Most Valuable Resources

how to invest in cobalt

Funds may directly invest in mining, such as the Vanguard Materials ETF. They may also invest in technology companies that rely on cobalt, particularly those oriented around batteries and next-generation energy. Gecamines, a state-controlled cobalt-mining company in the DRC, produced an estimated 13,860 MT of cobalt in 2021.

SmartAsset Advisors, LLC (“SmartAsset”), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. While cobalt is mined around the world, some of the largest producers are in politically unstable areas. The Democratic Republic of Congo alone produced 74% of all cobalt in 2021, according to the Cobalt Institute.

how to invest in cobalt

Investing in cobalt is a strategy that involves purchasing cobalt assets or stocks in companies that mine or use cobalt. Cobalt is a critical element in the production of lithium-ion batteries, which are used in a wide range of applications, including electric vehicles and mobile devices. Cobalt is a hard and lustrous metal and commodity found only in chemically combined form.

Wheaton Precious Metals

As a development company and a penny stock, Cobalt Blue is a very risky investment with success contingent on the company getting its mining operations online. Nevertheless, if its mine does begin operations, Cobalt Blue is worth keeping an eye on as a potential leader in cobalt production. The Amplify Lithium & Battery Technology ETF also isn’t a direct investment in cobalt. The fund focuses more on battery technology, which is a key driver of cobalt demand.

  1. The company has a $2 billion market cap with a $2 billion revenue posted in June 2020.
  2. Near-term growth in output is expected from the company’s operations in the DRC; this includes increased cobalt production at the Mutanda mine restart and at Katanga.
  3. She helps to educate investors about opportunities in a variety of growth markets.
  4. The metal is also used in car engines, jet turbines and turbine generators, airbags, enamel for steel products, and even as a drying agent in paints.

Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.

While the rush for cobalt is steadily rising, the supply may be riddled with issues. Human rights abuses in the Democratic Republic of Congo (DRC), where most of the world’s cobalt is manufactured, have strained its production. For investors in the U.S., note that Glencore is not listed on a U.S. stock exchange. Shares can be purchased over the counter as an ADR (which represent the stock of a foreign company).

Uranium Stocks: 5 Biggest Companies in 2024

One way to do this is through futures contracts, which allow you to literally purchase quantities of cobalt metal. You can also buy options contracts around cobalt futures, letting you invest in the future value of cobalt as a metal. With this said, impact investors can profit from investing in cobalt, but only if they do lots of research.

how to invest in cobalt

The company has a $2 billion market cap with a $2 billion revenue posted in June 2020. It is a top user of cobalt as well, and China Molybdenum is a top producer of the element. The Democratic Republic of the Congo has the world’s largest cobalt supply, holding half of it.

Investing in Cobalt ETFs

As EV adoption spreads globally, increasing amounts of the blue metal will be required, which is expected to support cobalt prices. Trading cobalt physically might not be the best option for most as it entails numerous issues with effort, transport, and security. Fortunately, investors interested in cobalt can use financial instruments such as cobalt exchange-traded funds (ETFs) to speculate on the prices of the resource without owning the resource. Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals.

Zhejiang Huayou Cobalt (SHA:

The small ETF held 106 battery-related stocks as of early 2023. If you’re interested in a more direct investment in mining stocks, the iShares MSCI Global Metals & Mining Producers ETF is a top choice. Its portfolio consisted of 259 global mining stocks as of early 2023.

The country also holds nearly half of global cobalt reserves, cementing its dominance. If you’re an investor looking for a quick profit, the best strategy involves buying cobalt investment stocks at low prices and selling them when the price rises. If you’re looking to invest in cobalt for the long run, you may be better off investing in ETFs. It focuses on the mining industry’s base metals, ferrous metals, and coal segments. Has a market cap of around $92 billion with over $40 billion in revenue in December 2020. This stock is not mentioned as a recommendation — on the contrary.

Step 4: Place your order and trade cobalt ETFs

This background fuels his entrepreneurial spirit and underpins his commitment to responsible investment. As the Founder and Owner of The Impact Investor, Kyle fervently advocates for increased awareness of ethically invested funds, empowering individuals to make judicious investment decisions. Cobalt isn’t usually exclusively mined, as it is acquired in conjunction with another metal. This means most of the companies listed below don’t deal exclusively in cobalt.

One is for lithium-ion batteries, especially ones in EVs (electric vehicles). The metal is also used in car engines, jet turbines and turbine generators, airbags, enamel for steel products, and even as a drying agent in paints. The ProShares S&P Global Core Battery Metals ETF is a relatively new fund that started trading in late 2022. It’s a tiny fund with minimal assets under management, making it very risky. However, it’s the first ETF to only invest in companies mining metals for batteries.

Striving to marry financial prudence with positive societal impact, Kyle imparts practical strategies for saving and investing, underlined by a robust ethos of conscientious capitalism. His ambition transcends personal gain, aiming instead to spark transformative global change through the power of responsible investment. If you’re wondering how to invest in cobalt futures, you may do so under the London Metal Exchange under the ticker CO. Cobalt futures began trading in 2010 and are quoted in US dollars per tonne. You’ll find contracts that range over 15 months, which will allow you to make bets over different periods.

It’s most heavily weighted towards specialty chemicals (25.7% of the fund’s holdings) and industrial gases (20.3%). However, it offers exposure to copper producers (5%), which also tend to produce cobalt. As with all commodities, you can also invest indirectly in cobalt by investing in companies and industries that use it. While individual equities are considered a speculative asset class, they’re typically far more stable than direct investment in a futures or options contract. That’s largely because lithium-ion batteries containing cobalt are used to power EVs.

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