Cobalt for Batteries

1. Rechargeable battery technology has existed since 1859. Today, it is an increasingly critical component of consumer electronics, electric vehicles and renewable energy storage.

2. This transformation is dependent on the widespread availability of some specific raw materials.

3. Cobalt is the rechargeable battery component that is most geopolitically risky to obtain: By a wide margin, production and reserves of cobalt are centered in the Democratic Republic of the Congo (DRC).

4. It is a byproduct of mining for copper there, which is also used in renewable energy technology.

5. The country supplies 65% of global cobalt currently. One-fifth of that production is mined by hand in “artisanal” mines.

6. This means the miners are subsistence contractors and the mine is not owned by a company with industrial equipment, unlike the byproduct mining at copper mines.

7. In a sign of the rapidly growing importance of this raw material, Germany’s VW Group, one of the world’s three largest automakers, solicited bids in 2017 for companies to supply 50 billion euros worth of cobalt over 10 years.

8. Cobalt was selling at around $30 per pound at the time on the open market. The company’s bid terms for cobalt supply specify that any bidders have to take measures to prevent the use of child labor in DRC.

9. Apple is taking similar steps to negotiate cobalt-mining contracts to supply its phone battery production.

10. DRC is the world’s 11th-largest country by land area and the largest in sub-Saharan Africa.

11. The government is headed by strongman Joseph Kabila. He recently triggered violent protests by delaying presidential elections indefinitely and aspiring to remain in power permanently.

12. Concern over the security of mines and safety of the miners in DRC will remain as cobalt production expands significantly there.

13. This could push cobalt suppliers to shift to other countries with byproduct cobalt at existing mines for other metals.

14. Automakers and battery developers also might decide it is safer and more cost-effective to find alternatives to cobalt entirely.

15. Since riskier cobalt is also sometimes associated with nickel mines as a byproduct, some nickel mines in safe countries might become more useful in battery production for their cobalt than for their nickel directly.

Sources: Investing News, Statista, Bloomberg, Daily Kanban, Reuters, The Globalist Research Center