Investing in Cobalt Stocks

Cobalt is a base material used in manufacturing. Usually a byproduct of refining copper or nickel, this element is used in items that include electric vehicle batteries, industrial equipment parts, and paints.

Particularly due to rising demand for lithium-ion batteries in electronic devices and electric cars, cobalt prices rose steadily during the COVID-19 pandemic. Mining companies increased output in response, leading to a cobalt surplus. Demand also dropped for several reasons, including the development of low-cobalt batteries and concerns about human rights and environmental abuses in the Democratic Republic of Congo, where more than 70% of cobalt was mined in 2022. As of mid-August 2024, the spot price of cobalt was down more than 60% from the highs it reached about two years prior.

Still, cobalt is used in most EV batteries and has a wide range of applications. Investing in cobalt stocks is worth considering if you believe its widespread use in battery technology and renewable energy will continue.

Best cobalt stocks

Best cobalt stocks

Like any other commodity, cobalt prices can be highly volatile. Additionally, since cobalt is a byproduct, there aren't really any pure-play cobalt stocks within the metal mining industry. Many cobalt stocks aren't listed on a U.S. exchange.

One good option is buying shares of an international mining exchange-traded fund (ETF) that invests more specifically in businesses involved in battery tech, such as the iShares MSCI Global Metals & Mining Producers ETF (PICK -0.03%) or the Amplify Lithium & Battery Technology ETF (BATT 1.28%).

Here are seven stocks to watch in 2025 that are involved in the production of cobalt:

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1. BHP Group

One of the world’s largest mining companies, BHP Group is an Australian-based company with operations all over the globe. The company mines metals, base materials, and energy. Copper and nickel are among its top products, so cobalt (one of the byproducts of refining these two metals) is naturally mined by BHP.

In 2021, BHP signed a partnership agreement with AI computing start-up KoBold Metals, which uses algorithms to make decisions on land purchasing and exploration. The agreement with the start-up, which counts Bill Gates and Jeff Bezos among its investors, is designed to help BHP obtain metals such as cobalt and nickel used in the manufacture of electric vehicle batteries and other renewable energy projects.

Although mining is a cyclical industry, BHP Group is consistently profitable and tends to generate operating profit margins well into the double-digit percentages.

2. Vale S.A.

Vale is another top producer of metals and base materials. Based in Brazil, it is one of Latin America's largest companies. It is the world's top producer of iron and nickel, as well as a top producer of other metals used in battery manufacturing, such as manganese and copper.

As a miner of nickel and copper, Vale is also an ancillary supplier of cobalt. It isn't a significant revenue generator for Vale, but the company is nonetheless worth mentioning, given its status as a top miner of basic metals used in all sorts of industries.

Like BHP Group, Vale also benefits from its massive scale. It consistently generates some of the best operating profit margins in the mining industry.

3. Glencore

Switzerland-based Glencore is another global mining operation. Among its energy, recycling, and mining assets are the production of base metals such as copper, nickel, and, of course, cobalt. In fact, Glencore is one of the world’s top producers of cobalt, primarily as a byproduct from its copper mines in the Democratic Republic of Congo.

For investors in the U.S., note that Glencore is not listed on a U.S. stock exchange. Shares can be purchased over the counter as an ADR (which represents the stock of a foreign company). There are certain risks involved in owning shares of an ADR. Additionally, Glencore has not generated the same lofty profit margins as peers such as BHP and Vale over the past decade.

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4. Freeport-McMoRan

Freeport-McMoRan is another global mining and energy company and is based in Arizona. Freeport-McMoRan is one of the largest producers of copper, which is used throughout the global economy. As a copper miner, cobalt is part of the company’s portfolio of assets.

In 2019, Freeport-McMoRan reached an agreement to sell part of its cobalt venture for $200 million. The company retains partial ownership of the cobalt refining business. Like some other global mining companies, Freeport-McMoRan has historically generated very high operating profits from its mining assets.

5. Wheaton Precious Metals

As its name suggests, Wheaton Precious Metals is an investment in elements like gold and silver. However, it is not a mining company. Instead, Wheaton is a commodity “streaming” company -- meaning it enters into an agreement with a mining company to pre-purchase all or a portion of the miner’s production at a predetermined discounted price. Besides precious metals, Wheaton also acquires significant amounts of cobalt.

Although not directly involved in the production of base materials like cobalt, Wheaton harbors a valuable niche in the global mining space. It’s also very profitable and pays a dividend for investors looking for some investment income.

6. CMOC Group Ltd.

China is the world’s largest market for electric vehicles. It is a top user of cobalt as well, and CMOC Group Ltd. (formerly China Molybdenum) is a top producer of the element. In fact, via its copper mining assets in the Democratic Republic of Congo, CMOC Group Ltd. is the world’s second-largest producer of cobalt (which it derives as a byproduct from refining copper).

Like some other global mining companies, CMOC Group Ltd. is not listed on a U.S. stock exchange. Tread lightly before deciding to purchase via the OTC market. As an alternative to buying the stock, funds such as the ProShares S&P Global Core Battery Metals ETF (ION 0.53%) and the iShares Core MSCI Emerging Markets ETF (IEMG 0.5%) have the CMOC Group as a holding in their portfolio.

7. Cobalt Blue Holdings

This last company is a penny stock, a common type of listing in the mining industry. Currently, Cobalt Blue Holdings does not generate any significant revenue. This is an exploration and project development company whose primary concern at the moment is the Broken Hill Cobalt Project in New South Wales, Australia. If the development of the project is successful, the company hopes commercialization of the cobalt produced at the site can help it become a top producer of raw material for the battery industry. However, the company massively scaled back on the project's scope in early 2024 due to oversupply in the global cobalt market.

This stock is not mentioned as a recommendation -- on the contrary. As a development company and a penny stock, Cobalt Blue is a very risky investment with success contingent on the company getting its mining operations online. Use extra caution with companies like this. Nevertheless, if its mine does begin operations, Cobalt Blue is worth keeping an eye on as a potential leader in cobalt production.

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How to choose the right cobalt stock

How to choose the right cobalt stock

Investing in commodity production like cobalt can be challenging. Prices can fluctuate wildly; supply and demand change from month to month and year to year. Stocks of companies that produce such commodities can also fluctuate wildly in price. Focus on investing in established businesses with a track record of generating healthy profit margins, especially if you are an investor seeking more stable returns or investment income.