For many years cobalt has been viewed as an uninteresting byproduct of copper and nickel mining, but these sentiments are rapidly changing with the rise of new energy technology.

Lithium-ion batteries have become incredibly important for new technology, such as those being produced by Tesla Motors.  Over the past year Elon Musk has begun the mass production of these batteries in the $5 billion gigafactory that his company constructed.  The increased demand and production of lithium-ion batteries has changed cobalt’s reputation from a mining byproduct to a popular commodity.

Analysts predict that cobalt supply will not be able to meet the rapidly increasing demand, especially as sales increase for cars powered by lithium-ion batteries.  This gap between supply and demand means cobalt prices will be on the rise in the coming year. Since mid 2016 cobalt prices have already doubled and could potentially continue to increase.

This has come as great news for the company, Glencore, a global commodity producer and trader, also known for being the largest cobalt producer.  The company expects cobalt output to double over the course of the next year.  These are substantial increases that Glencore expects will have a very positive impact on the company’s financials.  Increasing the company’s output of cobalt has offset the costs associated with mining copper.  Because these two metals come from the same mine locations, increasing the cobalt output has had a very positive effect on copper mining for the company.  Analysts have said that a 10% increase in the price of cobalt has the potential to increase Glencore’s EBITDA by $150 million.  To further this success, the company has decided to purchase the largest cobalt mine in the world.

Of course, there are some skeptics of cobalt’s rise to fame.  A primary concern that many people have is the way that cobalt is produced.  This metal is not usually found on its own, but with nickel and copper.  Any increases in cobalt mining will have a direct impact on the way that copper and nickel are being mined as well.  Glencore has displayed pretty positive results in that respect, but not all companies may experience the same success that they have.  A second concern that many people have in terms of cobalt’s rise to the top is its reliance on demand.  At the moment, demand is surpassing supply and cobalt is reaping those benefits, but if demand drops, so will its popularity.  Lower popularity would mean lower cobalt prices, which would set the metal back to its original position as an unimportant side effect of copper and nickel mining.

While these are valid reasons for concern, the coming year is looking bright for cobalt and its spotlight.  Some investors expect that within one year the prices will experience another significant increase.  Glencore has put its faith in cobalt’s performance with their major mine purchase last month, and Tesla expects sales of lithium-ion battery powered cars to significantly increase between now and 2020.  It appears that the stars have aligned for this previously inconsequential metal, and its presence at the forefront of the industry should continue for the remainder of 2017.