Jon Hykawy: Sit on the Sidelines for Cobalt (for Now)

Interview conducted by Nicole Rashotte; article text by Scott Tibballs.

President of Stormcrow Capital Jon Hykawy told the Investing News Network (INN) that investors with an eye on cobalt would do well to stay on the sidelines for the time being amid price declines across the battery sector.

INN caught up with Hykawy at Mines and Money New York to talk batteries, with a focus on what’s happening in the cobalt and lithium spaces.

Hykawy said that, while both metals have seen declines, lithium and cobalt are going to be fine in the longer term.

“The 30 second synopsis is lithium will be fine, because we have so many mobile devices (and) we’re looking to produce batteries that can work in electric vehicles. Lithium is going to be fine. There really isn’t an alternative, certainly none that’s as safe or as low cost as lithium is.”

Cobalt, on the other hand, has suffered from oversupply recently, leading to falling prices. However, Hykawy said he is bullish in the medium to long term.

“Am I bullish on it? Longer term, yes. For the next year to 18 months, I’d say we’re still in a situation where the supply is definitely higher than the demand that goes along with it.”

For investors, Hykawy said that they’d be better waiting for cobalt. “There’s enough demand out there in the future to outstrip the supply we’ve got now.

“Cobalt is not really an energy booster in these batteries, it’s a safety mechanism and that’s necessary. If you’re going to put thousands of cells in an electric vehicle, you don’t want that car catching on fire in the garage and killing a family. That’s just not the way to sell vehicles — it’s not the way to conduct business.”

With demand in the bag, Hykawy said that supply is something to watch out for, as current oversupply is due to a few projects coming online. “Beyond that,” he said, “it’s hard to tell where we get huge new volumes of cobalt.”

Listen to the full interview above for more of his thoughts on the importance of cobalt in batteries, lithium recoveries and the place that electric vehicles will play in the modern household.

You can also click here to view our full Mines and Money New York playlist on YouTube.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.