I’ve been writing about a looming cobalt supply crunch that I refer to as the “Cobalt Cliff” since March 2016 when I learned that the overwhelming bulk of the world’s cobalt is a byproduct of copper mining in the Congo (72%) and nickel mining in other countries (26%). Last Thursday, I delivered a presentation on sub-sea mining and supply and demand issues in the cobalt market at the 19th Annual Advanced Automotive Battery Conference in San Diego. This article will summarize the supply and demand aspects of my presentation, describe the insurmountable cobalt supply deficits every non-Chinese battery and EV manufacturer will encounter in the front half of the next decade, and explain how the Cobalt Cliff could eradicate non-Chinese EV manufacturing before 2030.
Cobalt is a classic “technology metal.” It’s an indispensable raw material for a wide variety of highly sophisticated processed materials including superalloys, hard metals, cemented carbides, catalysts, pigments, permanent magnets, and food additives. It’s also an indispensable raw material for the mixed metal oxide cathode powders used in all high-energy lithium-ion batteries.
For the last 20 years, lithium-ion battery manufacturers have been incidental beneficiaries of rapid growth in global cobalt supplies as several massive copper mines in the Congo came online. The cobalt byproduct contained in Congolese copper ores was 7,000 tonnes in 1999 and 98,000 tonnes in 2018. In 2018, the Congo was the world's leading producer of cobalt with a 72% market share that will climb to 78% over the next three years. Without sustained demand growth from the battery industry, supply growth of that magnitude would have crushed cobalt prices because industrial demand is extremely inelastic.
Worldwide demand for refined cobalt was roughly 111,000 tonnes in 2018.
- Industrial customers used about 50,500 tonnes,
- Batteries for electronics and portable applications used about 47,000 tonnes, and
