ZAIRE'S COBALT SUPPLY COULD BRING BILLIONS : FORMER JUNK METAL IN DEMAND.

Byline: Peter Alan Harper Associated Press 

It's not traded on any market like gold or silver. Its uses aren't widely known. But mining companies are willing to risk war in Zaire to get cobalt.

As a key ingredient in compact batteries used to power cellular phones and the next generation of electric cars, the demand for the once-feared metal is expected to surge in coming years.

Zaire is estimated to hold anywhere from half to two-thirds of the world's cobalt reserves. But Zaire's mining has been in decline because of political turmoil, and the country has accounted for just one-fifth of the world's cobalt production.

However, as rebels get closer to ousting longtime President Mobutu Sese Seko, there are many companies interested in extracting Zaire's riches. Mining companies already have signed deals with the rebels for various ores and minerals.

And the future of the American automotive industry promises to increase the industrial appetite for cobalt, a key ingredient in nickel and lithium batteries that would give electric cars greater range.

``The market for electric vehicles is in its infancy stage,'' said Robert T. Hayden, executive director of the Electric Vehicle Association of the Americas. ``The basic point is this: Cobalt will be in growing demand.''

Kenneth MacLeod, president of International Panorama Resource Corp., a mining company that has invested in Zaire, said he expects worldwide cobalt consumption to rise from roughly 25,000 tons a year now to 29,000 tons by 2000.

Mining entrepreneurs say cobalt could be a better investment than gold. The relatively low cost of producing it already makes cobalt more lucrative than many other precious metals.

``It's probably one of the most profitable commodities in the world,'' said Alan Crawford, director of corporate planning and a shareholder in International Panorama.

Discovered by a Swedish chemist in 1730, cobalt is a hard, lustrous metal found in various ores - in fact, it is a byproduct often found in the waste of other metals - that is used mostly in one solid metallic state or another, although it can come in liquid or powder form.

It once was considered useless and dangerous because in some mines it contains arsenic. Perhaps its best-known use, as the pigment cobalt blue, is one of its least frequent.

Its primary use is in super-strong steel and titanium alloys that can withstand extreme temperatures, such as those employed in turbine engines, jet engines and aircraft wings, accounting for 42 percent of domestic demand.

A form of cobalt known as cobalt-60 is an important cancer treatment, used for radiation, while another form is used for the irradiation of medical supplies and spices.

Cobalt is used as an adhesive that glues steel to rubber in tires. Other applications include prosthetic implants, high-strength cutting tools, magnets, videotapes, vitamins and helicopter rotors.

Cobalt's price is largely determined by the players since there is no cobalt exchange, no daily price quote or even a listing on any of the world's various commodity exchanges.

Users know the traders or producers they need to turn to - and vice versa.