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Summary

  • Historically, lithium cobaltate (LCO) was the 1st Li-ion cathode material.
  • LCO has 2 major weaknesses: cost and stability at high voltage.
  • Primary cobalt mines are in Africa and Asia; LCO production is mostly in Asia and Europe.
  • LCO-powered Li-ion batteries are manufactured in Asia, with few exceptions.
  • A list of major cobalt mining companies, LCO producers, and battery manufacturers is provided.

This is the first in a series of articles describing the performance strengths and shortcomings of lithium-ion batteries (LIBs) as a function of established cathode materials, as well as identifying the leading material and cell manufacturers. Do not expect highly scientific explanations, but there will be semi-technical descriptions for better understanding of the underlying chemistry and handling issues in manufacturing. My objective is to cast light on those companies aligned with the applications of different cell chemistries.

Lithium cobaltate (LiCoO2, LCO) was the cathode material in the first commercial LIBs, produced by Sony (NYSE:SNE) in 1990. Their 18650 cylindrical cells (18 mm diameter x 65.0 mm height) produced a scintillating 1 amp-hr capacity at an average 3.7 volts, or about 3.7 watt-hr of energy. Today the same sized LCO-based cells output as much as 10.4 watt-hr, thanks to modifications to the LCO composition and advances in cell chemistry and design. LCO is the industry standard powering many hand-held communication devices and laptops, and its production process is well defined.

The major weakness of LCO is its instability at high charge voltage (greater than 4.2V), where the material starts to lose oxygen and heat up. In rare instances, the cells get hot enough to cause pressure build-up that results in vapor release through safety vents, and in extremely rare cases, these vapors can ignite. Although such events garner wide publicity and a flurry of knee-jerk reactions about the dangers of lithium-ion, the odds of this happening are less than 1 in 10 million. The most likely outcome of overcharging LCO cells (or any lithium-ion cell) is a shortened working life, caused by electrochemically decomposed electrolyte solvents forming an ion-blocking coating on the graphite anode.

Lithium cobaltate has a relatively high energy output, meaning decent runtimes between charges for mobile electronic devices. LCO cells are not so good when discharged rapidly, that is, for power applications such as portable tools. Doping LCO with other metals has increased energy levels by a few percent, but more importantly, has strengthened the molecular structure against oxygen loss, thus enhancing battery safety. Few batteries with unmodified LCO can be found outside China.

A secondary issue with LCO is the high and variable price of cobalt, which is categorized as a strategic metal, commonly found in high-performance steels and magnets. In recent years, spot prices for cobalt have ranged from $20 to $75 per pound, subject to speculation and the political stability of African nations where the metal is most abundant. While this is not a major problem for small battery cells containing 10-12 grams (0.3-0.4 ounces) of cobalt, a 40kWh electric vehicle battery would hold about 70 kg (150 lbs) of the metal as LCO. Given that automotive manufacturers fight to minimize and stabilize supply costs, it is little wonder the LCO-derived energy is not in the future of electric vehicles.

The supply chain for LCO and LCO-powered batteries ranges from mining operations to cell manufacturers. Following is a list of the larger producers in this arena.

Democratic Republic of Congo has 45% of the global cobalt reserves and supplies 55% of the annual cobalt output, with nearly all exported to China. Mining companies are state-owned but some foreign partnerships exist, including ENRC (S Africa), Glencore Xstrata (Switzerland), Groupe Forrest International (Belgium), and Freeport-McMoRan (NYSE:FCX)/Lundin Mining (Canada). Finland, Norway, and Canada are also leading producers of the metal. (Roskill, 2013)

North American cobalt mining and production companies include OM Group (NYSE:OMG), Caledonia Mining, Formation Capital, Geovic Mining, PolyMet Mining (NYSEMKT:PLM), Global Cobalt, and Vale Inco (NYSE:VALE). Other leading suppliers of cobalt metal, alloys, and chemicals include Eramet, Norilsk Nickel (OTCPK:NILSY), and Sidmet (Europe), and BHP Billiton (NYSE:BHP), Sumitomo (OTCPK:SSUMY), and Nicomet (NASDAQ:ASIA).

BASF (OTCQX:BASFY), Umicore (Belgium), Merck KGaA (Germany), and L&F Material (Korea) are major LCO producers. Japan has several LCO suppliers, most restricted by kiretsu relationships: the largest are Seimi Chemical, Fuji Pigment, Nichia, Nippon Chemical, Honjo Chemical, and Toda Kogyo.

The following Chinese companies are among the bigger LCO manufacturers: Citic Guoan Mengguli, Reshine New Material, Pulead Technology, Seimi Tongda Lithium Energy, Shanshan Tech, B&M Science and Technology, and Huijie Industrial. There are numerous Chinese companies producing LCO-based Li-ion cells, primarily for regional use. Materials and batteries are rarely exported unless there is a joint venture with a foreign firm.

Major lithium-ion battery producers utilizing LCO (ex-China) include Samsung (OTC:SSNLF), Sony, Panasonic (OTCPK:PCRFY), Hitachi Maxell, Sanyo (OTC:SANYY), NEC Tokin (acquired by Kemet) (NYSE:KEM), Varta, and Eagle-Picher (OTC:EGLP).

Battery manufacturers and OEMs are striving to find lower cobalt content materials for lithium-ion cathodes without sacrificing performance and safety. Future articles will describe alternates to LCO, as well as 2nd and 3rd generation materials based on the LCO structure that produce greater energy with improved stability. Expect the use of cobalt in lithium-ion cells to decline further with the increased use of these enhanced cathode materials. Further, there will be less dependence on cobalt ore for LCO, as lithium-ion recycling programs are mandated in most countries, and cobalt recovery is high. Battery manufacturers with global sales will be little impacted by the development of next-generation cathode materials: they will simply exchange the old for the new, resulting in longer run time and more apps for portable electronic devices. Finally, watch for the emergence of such high-performance, low-cobalt cathode materials to coincide with major growth in the electric vehicle (not hybrids) market.

Note on the author: W F (Rick) Howard has over 23 years experience in the lithium-ion industry, from composition patents to production of materials and batteries.

Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Source: Lithium-Ion Batteries Part 1: Raw Materials To Production