It had all the makings of a typical VIP ribbon cutting: Government officials, diplomats, light refreshments, an actual ribbon.

"We even have scissors!" Joked the host.

What wasn't so typical? To get to this ribbon cutting, people had to fly across the country and brave 30 miles of unpaved switch-backed roads, to get to a remote mine, 8,000 feet up in Idaho's Salmon River Mountains, near the border with Montana.

The Middle of Nowhere, Idaho.

"I'm really stoked to be here," said Arthur Sinodinos, who was Australian Ambassador to the US. "I'm out in the middle of nowhere in Idaho with some of my best friends for the opening of their cobalt Mine."

A cobalt mine. More specifically the only operating cobalt mine in the US. Cobalt is a silvery-blue metal that is an essential ingredient in the batteries that power our phones and electric cars.

A Star is Born: Cobalt's meteoric rise

Cobalt's rise to fame and fortune has been pretty meteoric. It's probably the closest thing the periodic table has to a TikTok star. Thirty years ago, nobody really cared about cobalt–it was a silvery, metallic byproduct of copper and nickel mining. But now? Cobalt became a superstar, desired and sought after the world over. What changed?

Lithium ion batteries.

Those would be the batteries in our phones and electric cars. Cobalt is an essential material in those batteries: It stabilizes them and gives them a longer life. As we all became more and more addicted to our phones and devices, and as countries like the US and China began investing heavily in electric vehicles, cobalt became the center of attention. Concerns arose about mining practices in the Democratic Republic of the Congo, and cobalt was so critical that Apple actually purchased its own cobalt mine in the DRC to lock down a reliable supply.

That's the thing about cobalt. For all of its star power, it can be very hard to find.

The Cobalt Supply Problem

Right now, most of the cobalt the US and its allies use comes from mines that are owned or controlled by China or the Democratic Republic of the Congo. And that's a potential problem. Batteries are a key part of the strategy to replace oil as a main source of energy and if that energy supply is put in jeopardy, it threatens the economy's ability to function. US relations with China and the DRC can be tense, and if that came to threaten the West's cobalt supply, it could cause a lot of problems. The Biden Administration even identified a lack of cobalt mines as a threat to national security.

The obvious solution? The US and its allies need to open cobalt mines of their own. But that's easier said than done. Big deposits of cobalt are relatively rare. The Salmon River mountains have one of the only known major deposits in the country. And that is why a bunch of officials showed up to watch the ribbon get cut on a little Idaho mine.

Cobalt is Critical

"Cobalt is critical to national security," asserts Bryce Crocker, CEO of Jervois Global, the Australian company that opened the Idaho mine. "Certainly governors don't turn out for gold mine openings, nor do ambassadors, nor do U.S. government agencies. But for critical mineral projects like cobalt? When the United States has no other supply? They come out."

And come out they did, including Idaho Governor Brad Little, who spoke at the ribbon cutting.

"I'm a politician. I'm supposed to take credit for the weather," he said laughing. It was a clear, sunny October day. The audience laughed. Little went on to speak at length about the importance of the mine, which represented jobs and revenue for his state.

"Some call cobalt critical, some call it strategic, I call it damn important," he said. "You think about the win for the future of this country... The number of people that win as a result of this is just absolutely incredible."

All in on Cobalt

Winners like the Biden Administration, which has made the switch to electric vehicles and battery power a central part of its policies. Also the auto industry, which had thousands of electric vehicles rolling off assembly lines this year. Also the Defense Department, which now uses cobalt as a key ingredient in drones and other aircraft.

With that kind of government support and industry demand, investing in the country's only cobalt mine seemed like a dream business venture for Jervois.

"It was a huge opportunity," says CEO Crocker. "Obviously, this is why we've invested." Crocker spent $150 million developing the mine. Meanwhile, demand for cobalt was soaring–it's expected to nearly double over the next few years.

The economics, the politics, and even the weather seemed to line up, as Crocker cut the fat purple ribbon to unveil the mine.

Closed before it opens

But then, something rather shocking happened. The price of cobalt–around $40 a pound in early 2022–started to drop. The price fell from $40 a pound to $35. It was at $25 a pound by the time everyone was gathered in the mountains of Idaho for the ribbon-cutting.

"After that, the cobalt price steadily collapsed," Crocker recalls. The price hit $15 a pound. At that price, Jervois would lose money pulling the cobalt out of the ground. So, just weeks before the mine was set to open, Crocker made a tough call.

"Unfortunately, shortly after the opening ceremony, we had to close the mine before we started," he says quietly, "...and let go of almost 300 people."

The great raw material disconnect

But how did that happen? With a limited global supply and demand going gangbusters, how did the price of cobalt crater?

"We call this the great raw material disconnect," says Casper Rawles of Benchmark Mineral Intelligence. He says even though cobalt has all the makings of a great investment, when it comes to metal prices, rules often don't seem to apply.

A tough business

First, says Rawles, mining is just a tough business. The costs are enormous. Between exploration, development, permits, and construction, opening a mine often takes a decade and costs hundreds of millions of dollars.

"I think the stat, on average, is that one in a thousand mines makes it to production," he says. And even if a mine does start producing, there's a constant worry about the price of the stuff getting mined. And metal prices are notoriously volatile. That means a mine can go from a cash cow to a money pit almost overnight.

In the case of cobalt, says Rawles, there was a massive ramp up in production during the pandemic as people bought more devices than ever before. Markets are still flooded with supply. At the same time, he says, global demand for electric vehicles, especially in China, has declined. That combination has been enough to keep cobalt prices depressed for more than a year.

Keeping the Faith

Mine owner Bryce Crocker is keeping faith. His company took a huge financial hit from its investment in the Idaho mine - it says it costs $1 million a month just to keep it on warm standby. Still, he believes the markets will have to catch up with the political realities eventually, and he's determined to hang on until they do.

"I'm up at the mine today," he says. "I just came out from underground." Crocker is talking to companies and potential investors, trying to get an infusion of cash. And there have been some bright spots: The Department of Defense kicked in $15 million for Crocker to continue developing the mine and Crocker is also talking with the government about the possibility of creating the country's first cobalt refinery. (Right now the closest one is in Finland).

Forward momentum

"We're very confident in the longer term," asserts Crocker about the mine. "Now it's a question of maintaining forward momentum."

Crocker says as soon as the price rises to at least $20 a pound, he will be able to open the mine in a matter of weeks... recut that ribbon and start digging.