Canada has the seventh-largest cobalt reserves in the world, and the top producer (Domestic Republic of Congo) has more reserves than the next ten countries combined.
This skews the market a bit, especially if you consider the fact that cobalt is the most expensive part of Lithium-Ion batteries and makes up about a quarter of the total cost.
And with EVs on the rise, an essential ingredient like cobalt might be an asset worth investing in, if not directly, then through the best cobalt stocks in Canada.
Best Cobalt Stocks In Canada
It’s important to note that there are few dedicated cobalt producers in Canada. Most Canadian cobalt companies are primarily nickel or silver companies that produce cobalt as a by-product.
- Wheaton Precious Metals (WPM.TO)
- Jervois Global (JRV.V)
- Anglo Pacific Group (APY.TO)
- Sherritt International (S.TO)
- Electra Battery Materials (ELBM.V)
- Nickel 28 Capital (NKL.V)
- Fortune Minerals (FT.TO)
- Namibia Critical Metals (NMI.V)
- Canada Silver Cobalt Works (CCW.V)
Wheaton Precious Metals Stock
- Ticker: WPM.TO
- Industry Niche: Precious metal streaming
- Forward Dividend Yield: 1.74%
- Dividend Payout Ratio: 35.52%
- Dividend Yield (12-Month Trailing): 0.93%
- Upcoming Dividend Date: Dec 08, 2023
- Market Cap: $28.98 Billion
- Forward P/E Ratio: 36.35
Wheaton is a streaming company that usually buys part or all of the metal produced by the mines/mining companies it finances, usually at a discounted price.
And since its stake is purely financial, there is relatively low risk, and the portfolio is significantly more diverse and spread out than a miner’s. It has access to cobalt through its contract with Vale.
Only a small portion of its revenue comes from cobalt (4% in the next five years expected), but the amount of cobalt it gets from the producers/have access to is massive.
Wheaton is a decent cyclical growth stock and a modest dividend stock. You need to buy the dip (as deep as you potentially can) to get the best of both worlds.
Jervois Global Stock
Jervois is headquartered in Australia and cross-listed in Canada in 2017. The company has operations in multiple countries, including the US, Finland, and Brazil, and it aims to become one of the largest suppliers of cobalt to the global EV industry.
It owns the largest nickel and cobalt refinery currently in existence in Latin America. The US operation (Idaho) will be the first operational cobalt-only mine in the country.
The company generates a decent portion of its revenue from the battery market though the chemical market still retains the top spot.
Anglo Pacific Group Stock
The UK-based Anglo Pacific is a royalty and streaming company that focuses on a variety of metals, including cobalt.
Its extensive portfolio of royalty and streaming includes two cobalt-based projects, one in the production stage and one in development.
The company’s exposure to cobalt is akin to Wheaton’s exposure to it, though Anglo Pacific’s heavy lean towards base metals, many of which are used in batteries, offers it a higher degree of overlap with the battery industry.
The stock is a relatively slow mover, so the potential for loss and profit both is relatively muted.
Sherritt International Stock
Sherritt is one of Canada’s largest producers of high-purity nickel and cobalt. Its main production facility is in Moa, Cuba, and the mined (and partly processed) raw material is refined in Canada.
The reserves in Cuba are significantly higher than in Canada, with relatively fewer competitors due to the disputed nature of the region. This gives Sherritt a significant competitive advantage.
And even though the company is more oriented toward nickel, its cobalt production capacity ensures that a spike in cobalt demand may reflect in the company’s financials and stock as well.
Electra Battery Materials Stock
Electra has a vision – North America’s first sustainable battery material park, and as the most expensive battery metal, cobalt has an important place in that vision. In the first step of its positioning in the EV battery supply chain, the company has commissioned a battery-grade cobalt sulphate plant (local extraction).
And cobalt is one of its six primary planned products. Once functional, it will be the only refinery of its kind (and capacity) in North America.
Nickel 28 Capital Stock
Nickel 28 focuses on the two most precious and expensive battery metals – nickel and cobalt, and it’s well-positioned for the production of both.
And through its four royalties (out of 13), it also stands to gain a lot (financially) from the price upswings of cobalt.
Through just one of its projects (Ramu Nickel-Cobalt Operation), where it has a relatively small stake, the company has a production capacity of around 800,000 pounds per annum.
Fortune Minerals Stock
Fortune Minerals is a fraction of what it used to be in its glory days. It’s a Canadian development stage mining company that is currently focused on one project (NICO), which holds reserves for multiple metals, including cobalt.
It has rights on some other projects as well, and the financials are not as tightly tied to cobalt as most other companies on this list.
Namibia Critical Metals Stock
As the name suggests, this mining company focuses primarily on Namibia. It has a portfolio of projects there that it has been developing since 2005.
It acts as a regional partner to mining companies and other metal-related businesses that wish to extract critical metals from Namibia.
The company is currently positioning itself as a major exploration partner for cobalt producers entering the region. And even though none of its active projects are focused on cobalt, this may change in the coming years.
Canada Silver Cobalt Works Stock
Canada Silver Cobalt’s primary focus is exploring and developing silver resources in Canada, and cobalt is the major by-product.
It has multiple projects in place with decent inferred resource quantities. Even though silver is its primary production and the financials and the stock are more likely to sway with silver prices, the company has already started positioning itself in the cobalt space, thanks to its decent production capacity.
Cobalt – Market Dynamics
Cobalt prices have seen a drastic shift in the last decade.
The price is per ton of cobalt, and it has experienced two spikes in the last decade, going up as much as 400% from the lowest to the highest point.
This indicates volatility and massive scope for growth, both of which can be very attractive traits if you can capitalize on them properly.
The EV boom is expected to be the largest catalyst for driving up cobalt demand around the globe, and the current projections suggest that the demand is going to outpace supply, driving up prices.
Another reason the prices are up so much is that China is buying up as much as it can, which is understandable since it’s leading the charge in EV manufacturing.
In 2020, it spent twice the amount on Cobalt imports than the next four countries combined.
Things become even muddier if you start looking into China’s influence (both economic and political) in the Democratic Republic of Congo, where the bulk of the entire world’s cobalt supply comes from, which might give it more ready access to cobalt.
Future of Cobalt Stocks in Canada
With the increasing demand for EVs and the consequential rise in the need for lithium-ion batteries, cobalt’s significance in the market is expected to escalate. Canada’s vast cobalt reserves place it in a strategic position to capitalize on this burgeoning demand.
Despite the dominance of the Democratic Republic of Congo in the cobalt market, political instability and ethical concerns related to cobalt mining in the region might drive manufacturers to seek more stable and ethically-sourced supplies.
Canada, with its strict mining regulations and ethical mining practices, stands as a favourable alternative.
The future of cobalt stocks in Canada seems promising. While market dynamics and global economic factors will always play a role, the increasing importance of cobalt in the green energy revolution suggests a positive trajectory for Canadian cobalt stocks.
Which Canadian mining companies have significant lithium and cobalt resources?
Nickel 28 Capital is a prime example, with its strategic emphasis on both these pivotal battery metals and its formidable production framework. Jervois Global, with its involvement in both nickel and cobalt production and refining, represents another strong contender in this space.
What Companies Mine The Most Cobalt?
Switzerland-based Glencore and Chinese China Molybdenum mine more cobalt than any other company globally. Among the top five, there is also the US-based Vale and the Congo’s own Gecamines.
Currently, Glencore is taking the lead, but there are strong indications that China Molybdenum might surpass it in the next few years in cobalt production.
Who Produces Cobalt In Canada?
Sherritt International is a major cobalt producer in Canada. In 2020, it produced almost 40% of the entire country’s cobalt production. Canada Silver Cobalt is another major cobalt producer in Canada. US-based Vale also produces cobalt in Canada.
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Cobalt is just one secondary commodity/market tied to the EV boom. But it has strong demand even beyond batteries for EVs, and thanks to the cost and supply limitations, the future of this metal looks quite promising.
It might even be a decent investment from an ESG perspective (at least environmental) as EVs are an important part of a green future, and cobalt is an important part of EVs.
So the best cobalt stocks in Canada are an asset pool definitely worth considering. You can always look into the EV stocks in Canada as well to make your portfolio even greener.