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General Market Commentary
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General Energy
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General Market Commentary
First Cobalt Corp: 2018 and the rising tide of Cobalt
2018 may very well go down in history as a key turning point for the cobalt industry. We can already point to the rise in demand for electric vehicles (EVs) dependent on ion lithium batteries, a notable increase in cobalt operations all over the world and, perhaps most notably, one of the biggest technology companies in the world redefining its cobalt supply chain.
It is the rise in battery technology (cobalt is a key component of lithium ion batteries) that has completely changed the industry’s outlook on the metal. In fact, Trent Mell, President and CEO of First Cobalt Corp, believes that on a historic level cobalt has “somehow been forgotten”.
“Cobalt has always been seen as a by-product,” he says. “It was often overlooked and now we are seeing a lot of potential in like Canada where historically it just hasn’t been explored.”
First Cobalt is a vertically integrated North American pure-play cobalt company. Its ambition? To be the largest in the world. The company currently has three assets across North America: the Iron Creek Project in Idaho, the Canadian Cobalt Camp, and the only permitted cobalt refinery in North America capable of producing battery materials.
First Cobalt was formed with cobalt as a primary focus, even if that cobalt is still a by-product. Currently, the major source of cobalt around the world is the Democratic Republic of Congo, but Mell wants to disrupt this status quo.
“With Idaho and Ontario, we have what I think are two of the most prospective camps outside of Africa,” he says. “Our vision is simple: to mine, refine and sell cobalt in North America. It could be to Apple, to Tesla or to GM, it doesn’t matter who. There is currently no domestic supply in Canada and the US and I think that First Cobalt is positioning itself to be the first one to do exactly that.”
The company was only founded in 2017, but over the course of its first 12 months the Canadian firm has seen its market cap go from $15.3mn to over $190mn. Mell attributes this success to First Cobalt and its leadership team focusing on cobalt at a time where some of the major companies around the world are “playing catch-up”.
He points to a statement made by Ivan Glasenberg, Chief Executive of Glencore, in which he warned that western carmakers must wake up to the limited supply of cobalt in the world, identifying that recent activity from China and streaming agreements will leave companies struggling to catch up.
“We saw that headline and I think he’s right in some regards. A number of Chinese companies are signing cobalt streaming agreements and essentially locking up cobalt supply,” Mell says. “That’s what we are doing with our North American operations. We locked up the cobalt supplies in Ontario and Idaho before any other company woke up to the potential of these camps. It’s a real differentiator for us.”