supply and demandfrom a Rick Rule interview:
Substitute Scandium for Cobal.
Yeah, I think the cobalt market will go higher than lower. Cobalt is a unique commodity in that demand for it is constrained only by supply. That’s very unusual. The utility of cobalt is spectacular. The ability to derive new fabrication uses for cobalt is constrained only because the fabricators don’t see where the supply would come from if they developed new uses for the material. Sort of like that old movie about baseball. If you build it, they will come.
In truth, cobalt is a very odd material in that the more supply there is, the more demand for it will arise. That’s the bullet case. The bearish case unfortunately is that economic supplies for cobalt occur in Congo and Russia. Stop. Congo and Russia make fabricators nervous because they’re nervous about consistency of supply. They make financiers nervous because you wonder if after you develop some supply you will still own it. They make investors insecure because investors watch television and get fairly lurid reports with regards to Russia and Congo.
Investors want cobalt in places like Canada. There is cobalt in Canada but the Canadian cobalt supplies, with the exception of by-product cobalt at Voisey’s Bay and in Inco at the Ultramafic complexes, is too small to ever develop into bottom quartile cash cost producers.
The only exception that I see in terms of the availability of cobalt in jurisdictions that are believed to be politically secure would of course be the Syerston deposits in Australia controlled ultimately by Robert Friedland. Not ironically.
P.S. Syerston ;)