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Investing in cobalt stocks

It’s rare and in high demand — before you invest, here’s what you should consider.

Cobalt is one of the most rare, expensive and sought-after metals on the market. But an investment in cobalt is far from foolproof. Investors in Australia should be wary of the dangerous and violent conditions that contribute to instability in cobalt acquisition before investing in cobalt stocks.

What is cobalt and how is it used?

Cobalt is a hard, metallic element used to manufacture batteries, magnets, paints and chemical catalysts. It’s rare, valuable and in increasingly high demand thanks to the rise of electric vehicles.

Over two-thirds of the world’s cobalt is mined in the Democratic Republic of Congo. Other major cobalt producers include Cuba, Russia, Australia and the Philippines.

Why invest in cobalt stocks?

It’s no secret that the tide of vehicle manufacturing is shifting. Thanks to environmental movements worldwide, electric vehicles have become less of a novelty and more commonplace than ever before.

And what do electric vehicles need to function? Batteries.

Cobalt is an essential part of the electric vehicle manufacturing process, as it’s a key component of lithium-ion batteries. Many industry experts expect the demand for cobalt to rise in the coming years with the projected impact of electric vehicles on the automotive market.

Risks of investing in cobalt stocks

A major risk facing cobalt investors is the location of the majority of the world’s cobalt supply: the Democratic Republic of Congo (DRC). Historically, the DRC has been marked by political instability and civil unrest. Volatile political shifts have the potential to impact supply chains and security for cobalt operators in the DRC is far from guaranteed. The process of cobalt mining is also fraught with conditions that violate human rights.

As a result of the unstable and violent conditions that surround cobalt acquisition, a number of companies that rely on it, including Tesla, are actively seeking a workaround to avoid overreliance on the difficult-to-procure metal. As electric vehicles become more popular, some manufacturers are working to develop methods of electric power that reduce or eliminate the need for cobalt.

That said, such a solution is still many years from mass production. Industry experts suggest electric vehicles will continue to rely on cobalt.

Cobalt stocks

Most of the companies on this list don’t deal exclusively in cobalt — the mining and refining of cobalt is typically conducted in conjunction with another metal. Most cobalt stocks require an international brokerage account to trade, as few of these multinational companies trade on Australian exchanges.

Compare domestic trading platforms

Some cobalt stocks, like New World Resources and Cobalt Blue Holdings, are available on the ASX. That means you can easily purchase them with any brokerage account in Australia. The table below compares some of the most popular Australian brokers.

But if you plan to heavily trade cobalt, you’ll want to compare international brokerage accounts that offer access to foreign exchanges.

Name Product Price per trade Inactivity fee Asset class International
eToro
Finder AwardExclusive
eToro
$0
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
CFD service. Capital at risk.
Join the world's biggest social trading network when you trade stocks, commodities and currencies from the one account.
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Moomoo Share Trading
US$0.99
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get $100 to trade when you deposit $1,000, or $200 when you deposit $5,000 or more. Earn 6.8% p.a. on uninvested cash. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Tiger Brokers
US$2
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Webull
US$0.25
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Get advanced research and trading tools with $0 brokerage and free lvl 2 NASDAQ stock data for 30 days. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Saxo Invested
US$1
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Access 22,000+ stocks on 50+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Bottom line

Cobalt plays an important role in our modern society, contributing to the production of batteries, magnets and chemical catalysts. While its primary production lines in the DRC are far from stable, experts believe we will continue to need cobalt to produce electric vehicles in the coming years.

To invest in cobalt, you’ll likely need an international brokerage account. Compare your platform options to find the brokerage that best fits your needs.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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