Investment Strategist, CEO, Hokkaido Asset Management

Benjamin Pedley

Investment Strategist, CEO

Hokkaido Asset Management

Thematic (Sector/Industry)

Australia Materials / Thematic (Sector/Industry)

When it comes to stock themes it helps to have a simple story that makes sense to investors both experienced and new, and that’s why the nascent rally in Australian cobalt stocks is so compelling and looks to have a long, long way to run due to a structural supply shortage. You see cobalt, not a well-known metal outside of those in the mining industry, is typically the by-product of mining nickel and is a key component of new generation batteries that are being used to power electric vehicles (EVs). When you think battery technology you must think of cobalt.Indeed, according to the US Geological Survey much of the demand for cobalt, roughly 49%, is driven by batteries in cellphones and <a href="https://www.theguardian.com/environment/2017/jul/29/electric-cars-battery-manufacturing-cobalt-mining" target="_blank">increasingly self-driving cars</a>. As evidence of this, <a href="https://www.reuters.com/article/us-volkswagen-cobalt-evs-exclusive/exclusive-vw-moves-to-secure-cobalt-supplies-in-shift-to-electric-cars-idUSKCN1BX1RE" target="_blank">Volkswagen in September put out a tender</a> for a direct cobalt supplier for ten years from 2019. That makes it one of the largest procurement projects in the automotive industry, VW said, signaling a US$24 billion shift to electric vehicles.

When it comes to stock themes it helps to have a simple story that makes sense to investors both experienced and new, and that’s why the nascent rally in Australian cobalt stocks is so compelling and looks to have a long, long way to run due to a structural supply shortage. You see cobalt, not a well-known metal outside of those in the mining industry, is typically the by-product of mining nickel and is a key component of new generation batteries that are being used to power electric vehicles (EVs). When you think battery technology you must think of cobalt.Indeed, according to the US Geological Survey much of the demand for cobalt, roughly 49%, is driven by batteries in cellphones and increasingly self-driving cars. As evidence of this, Volkswagen in September put out a tender for a direct cobalt supplier for ten years from 2019. That makes it one of the largest procurement projects in the automotive industry, VW said, signaling a US$24 billion shift to electric vehicles.

EV Batteries Power Up Cobalt Small Caps Down Under