China Ignites a Resource War Over This Goblin Metal
No lithium-ion batteries. No electric vehicles. Oh, and no smartphones, either.
That’s how important goblin metal is to us.
For some, namely Apple, Tesla, Volkswagen, and every other tech and auto company on the planet, securing future supplies of “blue gold” is the difference between posting a profit and filing for Chapter 11.
But there’s a rub in all of this...
When two-thirds of the world’s supply of this strategic metal comes from just one, ultimately corrupt, country on Earth, then we’ve got a serious problem.
But we’ve talked before about the hellish working conditions that plague the DRC’s mining operations, haven’t we? Yet, even as those horrid stories filter out through the mainstream media, the world keeps turning.
Out of sight, out of mind, I guess.
But while it may be easy to overlook the artisanal mines in the Congo that taint the world’s cobalt supply, it’s impossible to ignore the fact that China has sparked a resource war that has caused an all-out scramble to secure the world’s hottest commodities.
It’s a once-in-a-generation boom you can’t afford to sit out... but I’ll get to that in just a second.
China’s Thirst for Goblin Metal
Few markets can boast a better performance for investors since 2016 than goblin metal.
Call it what you will: goblin metal, blue gold, or its more common name, cobalt.
It doesn’t matter.
After hitting a multi-year low around $10/lb. in early 2016, cobalt prices have surged nearly 330%. Last year alone, prices more than doubled, outperforming every other commodity by far.
In March, the going rate for a tonne of cobalt on the London Metal Exchange was about $91,500.
But I’m not going to tell you about Apple’s dire need for this material to sell its iPhones today, nor will I try to make you see just how crucial a role cobalt plays in Tesla’s future.
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No, we’re beyond that now.
It’s time to understand just how tight this market could get if China truly does corner the cobalt market. I tried to warn my readers a few weeks ago that China’s real trade war didn’t involve tariffs, but rather complete control of the strategic materials we rely on so much for today’s technology.
But how much control are we really talking about here?
Well, for starters, word is that China now controls over 60% of the world’s cobalt supply, with nearly all of it coming straight out of the Congo.
In fact, 80% of the DRC’s production heads straight to Chinese ports, where it can be refined into a workable product for tech, auto, and battery companies.
You can see how this might be a problem, right?
But you know the saying just as well as I do, don’t you?
In the case of cobalt, crisis truly does breed opportunity...
Securing Your Cobalt Profits
It all comes down to location.
Ever since cobalt prices started surging higher, it seems as if a new cobalt company comes out every day. And like every boom I’ve seen, nearly all of them are little more than wishful thinking for hopeful investors.
It’s hard for investors to not get excited when each battery in an electric vehicle uses around 10 kg. of cobalt. And with practically every car company on the planet constantly announcing new EV lines, and more countries adding to the hype with proposed bans on traditional fossil fuel-driven vehicles, you can see why this global transition is pushing cobalt prices higher and higher.
Are we seeing the beginning of the end for the internal combustible engine?
Even though this transition certainly won’t take place overnight, it’s not crazy to see that it’s inevitable.
And this, of course, brings us back to cobalt’s true value.
For one junior miner sitting on a billion-dollar cobalt mine, it’s only a matter of time before the Wall Street herd catches wind. Fortunately for my readers, they’ve been capitalizing on this boom the whole time.
And the faster you recognize the kind of lucrative opportunity this market presents, the better chance you have of beating the herd to the profits.
I’m talking about a small cobalt player whose shares are trading for under $1.50, yet that owns the most advanced-stage primary cobalt deposit in the United States.
I can’t possibly explain how crucial that last part is.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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