Cobalt – pricing blues or investment opportunity?

Cobalt is used in a range of applications and in recent years has become recognised for its use in high-performance rechargeable batteries, which are a core component of electric vehicles (EVs).

Cobalt supply and demand: geopolitical risks explained

Few metals have such a clear and binary geographical split of supply and demand. Around half of the world’s exports come from the Democratic Republic of Congo (DRC), while China accounts for nearly half of the world’s imports.

This geographical concentration would seem to make investment in cobalt relatively risky, as global supply and demand could be significantly impacted by the political and economic situation in two countries. To illustrate this point, DRC halted all exports in early 2025 for three months, (to be reviewed in late May) which caused prices to spike.

While this volatility in pricing provides some potential for up-side in the short term, the longer-term prospects appear uncertain with mixed views in the market.

What is evident is that the cobalt price has been volatile in recent years. While there was a recent spike in prices, it did not recover to the highs seen 3–4 years ago, when the price increased significantly in response to growing demand for battery metals driven by global net-zero targets. Demand for electronic devices and EVs does continue to grow – a single electric car with a lithium-ion battery, for example, requires 5–10 kg of cobalt.

Is cobalt still a strategic investment?

Whether the current price is seen as a risk or an opportunity is a matter of judgement and one that is critical to would-be investors.

The down-side risks include oversupply, with more countries ramping up production, especially as a by-product of increasing copper production. There are also longer-term demand risks as some car manufacturers are starting to switch to cobalt-free lithium-iron-phosphate batteries. Add to this concerns about EV adoption and policy trends (particularly in the USA) away from net-zero, and it seems investing in cobalt is not for the faint-hearted.

Set against this, however, are predictions of continuing growth in demand in the long-term, the recognition of cobalt as a “Strategic Raw Material” by the European Union in 2024, and its numerous end uses. Indeed, cobalt has uses in aerospace and military applications and it is possible that increases in defence spending in the coming years may be a stronger driver of demand than growth in EVs.

Investing in physical holdings of cobalt while the price is low may provide investors with an opportunity to benefit from longer-term price and demand trends.

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If you would like to discuss the impact for your mining and metals business, please contact Graham Ricketts.