Home Critical engine What you need to know about cobalt and which ASX stocks are profiting from it

What you need to know about cobalt and which ASX stocks are profiting from it

0

Image source: Getty Images

You will find many large cap ASX stocks involved in gold, iron ore or coal.

But most ASX stocks exploring and producing cobalt are at the micro-cap and small-cap end of the spectrum.

We take a look at three of the biggest companies below.

But first…

What is Cobalt?

A hard, shiny and greyish metal, cobalt is a highly conductive metal. It has many uses, including adding color to glass and ceramics.

But we suspect its cobalt’s use in aircraft engine parts and its prevalence in lithium-ion batteries, computers and mobile phones which has seen the Australian government list the metal as a critical mineral.

The government reports that Australia has high geological potential for cobalt, with a demonstrated economic resource in 2020 of 1.5 million tonnes. In 2020, Australian miners produced 5,600 tonnes of cobalt, out of total world production of 135,000 tonnes.

Only Russia and the Democratic Republic of Congo, which mines around 70% of the world’s total cobalt, have produced more.

That said, which ASX stocks are looking for cobalt?

Three ASX stocks cash in on cobalt

First of all, we have Jervois Global Ltd (ASX: JRV).

With a market capitalization of $1.2 billion, it is the largest of the ASX stocks with a strong focus on cobalt.

The company is on track to start production at its Idaho cobalt operations, the only cobalt mine in the United States. It is also a producer of specialty cobalt chemicals in Jervois Finland.

And Jervois’ share price has soared amid booming demand for battery metals, with shares up 29% year-to-date.

then, we have Ardea Resources Ltd (ASX: ARL), with a market capitalization of $206 million.

Ardea Resources’ Kalgoorlie Nickel project, located in Western Australia, is the largest nickel-cobalt resource in the developed world. It has been granted “Major Project” status by the Australian Government.

The company is another beneficiary of the explosion in demand for battery metals, helping to push its share up 171% so far in 2022.

This brings us to our third cobalt-focused ASX stock, the aptly named Cobalt Blue Holdings Ltd. (ASX:COB).

Cobalt Blue has a market cap of $253 million.

ASX stock reports that it is poised to become one of the largest cobalt producers in the world thanks to its Broken Hill cobalt deposit in New South Wales. According to the company’s website, “If Broken Hill were a country, it would rank number 5 in cobalt production.”

Cobalt Blue’s share price is another standout performance this year, up 62% since the January 4 opening bell.