Get Your Cobalt On

The Canadian cobalt rush is underway.

Toronto is the Silicon Valley of mining, says Trent Mell, a Canadian lawyer putting together what he believes will be the biggest cobalt exploration company in the world. Just as America’s famed tech center operates as a self-supporting network of funders, Mell is looking inside Toronto for financial and legal resources.

“It’s the center of excellence,” Mell says of Toronto. “The stock exchange attracted mining companies because of the ecosystem of bankers, lawyers and accountants who know how to make money from mining.”

Once an often-ignored component of the periodic table of elements, cobalt is in high demand due to changing technology. But because the traditional sources for cobalt come from some of the most war-torn regions on earth, tech companies are scrambling to find new cobalt-rich resources.

Why cobalt? Because it’s an essential element in the lithium-ion batteries that power everything from your iPhone to your Tesla. The world is rapidly going electric, reflected in the price of cobalt, which has vaulted from $14.90 per pound in February 2014 to $27.90 per pound as of November 9.

“Every manufacturer is committed to electric vehicles,” says Mell. “The research and development dollars committed to combustion engines and diesel are sharply dropping.”
Mell says the demand for cobalt, which has a high melting point that makes batteries safer and allows them to store more energy, is growing by 14 percent a year and could double in the next decade.

“There’s not enough in the world,” Mell says.

Cobalt is mostly a byproduct of nickel and copper mining, which can be found throughout the world. But the epicenter of cobalt production is the Democratic Republic of the Congo, the central African country that New York Times reporter Jeffrey Gettleman has described as a “never-ending nightmare,” with a never-ending war that has claimed more than 5 million lives.

More than 60 percent of the world’s cobalt comes from the Congo. As recently as August, Mell’s First Cobalt Corporation held interests in seven prospective copper-cobalt properties covering 190 square kilometers in the Congo.

But because of the violence, the Congo is no longer a viable option for cobalt miners. First Cobalt has withdrawn from the violence-wracked country and is focusing its attention on homegrown mines.

“In Canada, that’s where investors want us to be,” Mell says. “Investors were telling us, ‘Don’t go to Congo.’”

First Cobalt is getting started at a mine in Ontario, near a town called, appropriately enough, Cobalt. A century ago, Mell said, the world’s biggest silver camp was there. The mine opened up in 1904 and operated into the 1960s, producing 600 million ounces of silver and 50 million pounds of cobalt. First Cobalt is betting there’s more cobalt there to be had.

According to Mell, “The nature of mining is a lot of discoveries are not discoveries, but rediscoveries.”