Cobal is first encountered outside the Earth Temple, where Link overhears a conversation between Cobal and his treasure hunting partner, Ledd, about the broken key required to enter the temple. He appears to be the smarter of the pair, suggesting that they bypass the door by digging rather than finding the pieces of the broken key. Once Link makes his way into the Earth Temple, Cobal explains that Ledd has gone ahead and, concerned, asks Link to look for him.
After obtaining the Goddess White Sword, Link can find Cobal in the caves under Eldin Volcano where Link obtained the Digging Mitts, in the northern part of the Pyrup maze section of the cave. Speaking to him unlocks the ability to Dowse for Rupees and he will tell Link how to be on the look out for thin cracked walls as they often conceal hidden caves that contain rupees and other kinds of treasure.
As many Mogmas seem to be named after metals and other minerals, it is possible that Cobal's name is derived from cobalt.