Cobalt Ore is a Hard Mode ore that can only be found after breaking a Demon Altar and receiving the message "Your world has been blessed with Cobalt!" It is found quite commonly under ground. Breaking one Demon Altar is all that is required to place multiple pockets of cobalt ore in your world. Cobalt Ore can be mined with a Molten Pickaxe.
Cobalt ore can get affected by lava's light and look like mythril ore.
Cobalt-based blue pigments have been used since ancient times for jewelry and paints, and to impart a distinctive blue tint to glass, but the color was later thought by alchemists to be due to the known metal bismuth. Miners had long used the name kobold ore (German for goblin ore) for some of the blue-pigment producing minerals; they were named because they were poor in known metals and gave poisonous arsenic-containing fumes upon smelting. In 1735, such ores were found to be reducible to a new metal (the first discovered since ancient times), and this was ultimately named for the kobold.