Sun Sentinel Palm Beach Edition
Mining town could get recharged
Battery demand for namesake mineral could revitalize Cobalt
Ironically, Cobalt, Ontario — population 1,100 — was built on silver.
Remnants of a boom that transformed the town more than a century ago are everywhere. A mine headframe still protrudes from the roof of the bookstore, which was previously a grocery. The butcher used to toss unwanted bones down an abandoned 350-foot shaft in the middle of the shop floor and keep meat cool in its lowered mine cage.
While the last silver mines closed almost 30 years ago, a global push for the village’s namesake metal is promising to breathe new life into the sleepy town 300 miles north of Toronto.
The whitish element (which “blooms” pink when exposed to air) was initially ignored by the area’s prospectors and later mined mainly as a byproduct of silver. Now, global demand for cobalt, a component in batteries used to power electric cars for automakers from BMW to Volkswagen, is changing the game.
Call it a cobalt rush in Cobalt.
“This area’s seen more airborne surveys in the last year than in the last hundred,” said Gino Chitaroni, a local prospector and geologist. “Two years ago, if you had a cobalt property you couldn’t give it away. All of a sudden, within six months, everything changed.”
Cobalt, both the town and the metal, are attracting renewed attention as a buffer to rising political risks in the Democratic Republic of Congo, which accounted for more than half the world’s 123,000-ton production in 2016, according to Natural Resources Canada. China and Canada were a distant second and third, each contributing roughly 6 percent of supply, followed by Russia and Australia. But as concerns grow about risk in Congo, even as demand swells, those smaller players stand to benefit.
“Anybody who has cobalt outside the DRC is in a better situation because carmakers are very worried about their supply chains,” said Roger Bell, director of mining research at Hannam & Parters in London. Bell believes the amount of cobalt being used in electric cars could easily double in the next eight to 15 years. “Even in the most conservative assumptions, you’re looking at maybe a 20 percent gap between supply and demand for cobalt by 2025.”
Stock investors betting on cobalt are already benefiting. First Cobalt Corp., a Canadian miner exploring in the Cobalt area, has soared 90 percent this year. Cobalt 27 Capital Corp., another miner based in British Columbia, has jumped almost 600 percent. Neither has any revenue.
The heightened interest in the metal is evident in Cobalt. Last month, two dozen investors, bankers and hedge fund managers from as far away as Shanghai boarded a chartered plane and then a bus from Toronto through the autumnal splendor of Ontario’s boreal forest. Their host was First Cobalt, a Vancouver-based miner that recently abandoned Congo in order to secure more land around Cobalt’s old mining camp.
“We’ve got some of the biggest resource companies in the world interested,” said Trent Mell, First Cobalt’s chief executive, fresh from eight weeks of travel through the U.S., Europe, Australia and Asia pitching his company to investors.
Given that early prospectors more or less tripped over the abundant silver deposits, the area is largely a blank slate when it comes to proper exploration, he said. Although cobalt was later extracted from the area, notably by Toronto-based Agnico Eagle Mines until the late 1980s, Mell believes much remains undiscovered, particularly at the site of failed silver mines. Both metals are even part of Agnico’s name, which comes from the symbols for silver (Ag), nickel (Ni) and cobalt (Co).
Today, the remains of those heady days are still visible in the crumbled foundations, capped mine shafts and piles of waste rock scattered in backyards throughout the town. More than 420 million ounces of silver came out of the Cobalt camp during its first 60 years and the town is built on a “honeycomb” of old mining tunnels and trenches, according to its mayor, Tina Sartoretto.
Sartoretto is hoping the renewed demand for cobalt will inject some economic life into her impoverished town. With no industrial base to speak of, the town struggles to survive on legacy endowments from past silver and cobalt miners Agnico and Teck Resources.
Sartoretto’s hope is that future mining will include plans for sustainable economic development tied to the metal. “If you were producing cobalt here, it would be nice if you could produce batteries here,” she said.
Depending on how First Cobalt’s exploration unfolds, the landscape in and around the town could be altered yet again. The company’s vision is for at least one open pit mine over a kilometer wide, said Frank Santaguida, First Cobalt’s vice president of exploration.
“Someday, that hill will likely be an open pit,” Chitaroni predicted, pointing to the far side of Cobalt Lake, where previously mined rock looms over a baseball diamond. The land currently belongs to Agnico, which hasn’t mined the area since 1989. “I wish they’d get proactive and drill off the damn thing.”
The Toronto-based company has no plans for exploration, said Dale Coffin, an Agnico spokesman.