Benedikt Sobotka: Cobalt market has fantastic potential

18.01.2017
newsImage

Benedikt Sobotka, the Group CEO, shares his thoughts on cobalt development this year and beyond:

“Perhaps my biggest passion is the cobalt market. Tesla has made electric cars cool and highly desirable, and we would like to bring a similar vibe to the cobalt sector, which plays an essential part in shaping the EV market. Given tighter emissions rules and a growing emissions scandal among diesel carmakers, the auto market is ripe for a dramatic change. At ERG, we believe in the EV revolution and that EVs will displace a growing proportion of petrol and diesel cars, thereby reducing carbon emissions and replacing foreign oil dependence with domestic electricity generation. Tesla alone hopes to manufacture 500,000 electric vehicles annually. Other car makers made equally ambitions statements about their EV targets. Most of the next-generation batteries, that deliver higher specific energy, contain cobalt in their composition, as it is still essential for batteries’ power capability. While cobalt prices have been very stable since 2011 until mid-last year, we think that prolonged period of relative stability is now over. After gaining 50% in 2016, we believe that the cobalt market still has a fantastic potential. We expect to see more dramatic volatility, within a strong primary uptrend, in which prices will likely touch USD17/lb within the next two years or less. Moreover, we think that investment demand will be a major determinant of the price even though it is relatively small now.”