Although rare it is mined as a significant source of the strategically important metal cobalt. Secondary weathering incrustations of erythrite, hydrated cobalt arsenate, are common.
The name is from the German, Kobold, "underground spirit" in allusion to the "refusal" of cobaltiferous ores to smelt as they are expected to.
It occurs in high temperature hydrothermal deposits and contact metamorphic rocks. It occurs in association with magnetite, sphalerite, chalcopyrite, skutterudite, allanite, zoisite, scapolite, titanite, calcite along with numerous other Co–Ni sulfides and arsenides. It was described as early as 1832.
It is found chiefly in Sweden, Norway, Germany, Cornwall, England, Canada, Australia, Democratic Republic of the Congo and Morocco.