Cobalt deposits can be found throughout the world and are most prominent in the African Copper Belt with over 60% of global cobalt production from a single country - the Democratic Republic of the Congo (DRC).
DRC is the antithesis of stability and has a long and checkered history tarnished by internal conflict, civil war and infrastructure issues.
China controls the majority of refined global cobalt output and is reliant on the DRC for over 90% of its cobalt supply.
There is a strong possibility of future geopolitical risk in the DRC resulting in significant material disruption to cobalt output with potential for a serious global cobalt supply squeeze
In 2016 approximately 60% of cobalt mined was as a by-product of copper, 38% as a by-product of nickel, and the remaining 2% from primary cobalt mines.
The main implication of this is that, unlike most base metals, changes to global copper and nickel production are the main determinants of changes in cobalt production rather than the supply-demand dynamics and pricing of cobalt itself.
It is expected that short-to-medium term cobalt supply will increase although at a slower pace than demand creating a supply deficit up until the end of 2019.