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Cobalt also has another property which has gone relatively unnoticed by athletes: it increases EPO when taken orally. This ought to be somewhat obvious, as it has been used to treat certain types of anemia, which is characterized by a lowered red blood cell count. Here's how it works:

Hypoxia Inducible Factor and the HIF pathway are responsible for the expression of a variety of physiological responses to oxygen deprivation and conditions of lowered oxygen intake - similar to what would be seen with altitude training, which itself relies on adaptations mediated by this pathway to stimulate an increase in endogenous EPO and red blood cells.

Typically, the mediator of HIF undergoes rapid degredation under conditions of adequate oxygen intake. However, in an oxygen-deprived environment, it remains active for much longer and sets off a sequence of events that (among other benefits) activates the gene for producing EPO that promote efficient adaptation to hypoxia. Cobalt chloride appears to mimic the oxygen-deprived state at the genomic level, thereby causing the HIF mediator to remain stable enough to initiate increased EPO production.

And this from a company catering to human athletes