This Mineral Is the Heart of the New Economy, and One Country Supplies Most of It

First Cobalt Corporation, a Vancouver-based miner, will take over American mining company US Cobalt Incorporated.

The all-stock deal is reportedly worth about $116 million dollarsThe buyout also represented a 61.8% premium to the closing stock price of US Cobalt shares on March 13.

“We’re trying to fast-track our way into North American mining and refining,” said Trent Mell, chief executive officer of First Cobalt.

Cobalt prices have surged over 60% over the past year in anticipation of global consumers switching from fossil-fuel powered to electric cars in the coming decades. 

Cobalt is used in the production of lithium-ion batteries found in products like electric cars, smart phones and computer chips.

First Cobalt, which is developing 50 mining facilities in Ontario as well as mill and refinery, will assume control of US Cobalt’s mineral exploration facilities in Idaho and Utah.

“The Idaho project is at a more advanced stage than our work in the Cobalt camp in Ontario. The appeal to us is that it is a faster pathway to production,” said Mell.

The Canadian mining company’s takeover of US Cobalt was strategically timed to take advantage of a projected boom in the production of electric cars and smart devices.

Industry experts have warned that global supplies of cobalt may begin to dwindle significantly by the year 2050.

“We foresee a shortage of cobalt over the next five years yet there are few companies doing significant work to identify new sources of supply,” Mell said.

“This transaction creates a larger platform to discover and develop cobalt projects for the growing electric vehicle market by combining high quality North American assets in two of the best cobalt jurisdictions outside the” Democratic Republic of Congo, a major global supplier in Africa.

Power play

The company is primed to become significant supplier in the cobalt industry in its own right.

Currently, most of the world’s supplies of cobalt are sourced from the Congo. Of the reportedly 120,000 tons of cobalt mined in 2017, about 64% of it was sourced from the DRC.

First Cobalt’s acquisition of US Cobalt may prove to be a financially shrewd move in light of mining industry legislation recently enacted in the DRC.

DRC president Joseph Kabila ratified a new international mining code law on March 15 that designates all in-country cobalt sources as “strategic minerals.”

International mining companies working in DRC previously paid a 2% royalty to mine in-country, the percentage will rise to 10% after the strategic designation.

First Cobalt, which mostly operates as a mineral exploration company, did not announce when mining and refinery operations would officially begin. There are no active cobalt mining operations in North America.

The London Metal Exchange listed the trading value of cobalt at $88,375 per ton.

TGIF — Ending the Week with a Whimper

Everything is proceeding as I have foreseen. In Monday's "The Week Ahead — 200,000 Deaths Weigh Heavily on the Market," we knew the 200,000th American death would put Covid back

Even If the Overall Market Continues Lower, This Staple Could Maintain Its Upward Trend

Since peaking in early September, the main indices have all three stumbled for the last few weeks with the S&P and Nasdaq falling over 10% from their highs already. Three

tesla stock

TSLA Too Volatile? Two Option Strategies for Tesla Stock

Tesla Inc. (TSLA) is one of the most popular stocks amongst investors. Led by CEO Elon Musk the electric vehicle manufacturer has disrupted the transportation industry, bringing hype to a

pot stock

Pot Stock ‘Blood in the Streets’ Buy Signal Is Here

The cannabis market has been a volatile space in recent years. A wave in legalization, particularly in Canada but also through parts of the United States, led to significant growth

Use Options as Portfolio Insurance in Rocky Times

Since the beginning of September we have seen the main U.S. indices drop. There are a number of possible reasons for the decline, but more importantly I expect the increased

4 Foreign Countries Where You Can Retire On Social Security Alone

Someone once said that retirement is not the end of the road but a highway opening to a new chapter in life. Whoever said that clearly has never experienced a

We’re Beating the Index Off the March Low: Update

The Bulletproof Wealth Report model portfolio is continuing to perform well and is now up 27.4% since the inception of our monthly newsletter on April 13, 2018. Although the value

Terrible Tuesday: Fed’s Powell Says U.S. Faces Slow, Uncertain Recovery

Powell testifies before Congress today. We already know what he's going to say though, as his testimony is pre-released. Not that that will stop the market from acting shocked when

5 Best Online Banks, Highest Savings Rates for Your Buck

Finding an online bank can be difficult. Varying rates, hidden fees and simply having too many choices can cause confusion and make it hard to get started. Set aside some

Hiring a Financial Advisor: What Is a Fiduciary, and Why Should You Care?

“Fiduciary” is a funny word. You may have never heard of it until now, but you may actually have had a fiduciary in your life. More importantly, you may wish

Trading Cryptocurrency Using Limit and Stop Orders

This is the last of a five-part series to help new investors and traders start and grow a cryptocurrency account. In all five articles I’ve been using Bitcoin (BTC) in

3 Cheap ETFs Combine to Create a Powerful Value Stock Opportunity

As I steadily increase my overall equity exposure to a measurable value bias, I do so using just three passive ETFs that are consistently near the top of their respective