Trent Mell, who heads the North American pure play cobalt company, said that while the EV sector is moving toward an era of lower cobalt content per vehicle, this nonetheless has positive implications for cobalt producers.

“It lowers the price of the battery packs which in turn will accelerate mass adoption of EVs over combustion engines,” he added.

Cobalt prices have reached 10-year highs on the back of concerns that soaring EV battery demand will result in a cobalt market supply deficit.

Metal Bulletin assessed prices for low and high-grade cobalt metal at $42-43 per lb, in-warehouse, on Wednesday June 6, steady on Friday’s assessment but down 0.8% and 0.9% respectively week on week amid continuing profit-taking and slower demand from consumers.

The global fleet of electric vehicles grew 54% in 2017, but this only represents a little over 1% of global vehicle sales, Mell noted.

“The EVs revolution is still in its infancy, yet cobalt production is in a deficit position and is projected to remain there for several years,” he said. “Miners are now playing catch up and success will come to the first movers who have the right team, in the right jurisdiction, with the right assets,” he added.

Over the past year, four cobalt companies have come together under the First Cobalt banner to create a vertically integrated cobalt company with assets in Idaho in the United States and Ontario, Canada.

The company’s assets include the only permitted cobalt refinery in North America capable of producing battery materials. First Cobalt has begun a study for a restart and expansion of the facility, which has been on care and maintenance for three years.

“This is significant because most cobalt in North America is found with high arsenic, which our refinery was designed to treat – unlike cobalt refineries found elsewhere in the world… The refinery is key to realizing early cash flow opportunities and we continue to assess our options for this asset,” Mell said.

“The refinery has the potential to treat feed material from First Cobalt’s own projects, historic muckpile material in the Cobalt Camp, third party concentrates and recycled material – creating a North American supply of cobalt sulfate for the EVs market,” he added.