MINING TECHNOLOGY -- Through various arrangements, China already controls around 85% of the global supply of cobalt and is rumoured to be in the market for more; but what does this mean for the availability of a key commodity that has already rocketed in price by 260% since Jan 2016? Heidi Vella investigates.
The blueish-grey chemical element cobalt has emerged from relative obscurity to reach notoriety as a key component of lithium-ion batteries – the technology required to power the smart technology revolution.
Currently, the electric battery market only accounts for around 10% of total cobalt usage, but that number is rapidly rising in line with sales of electric vehicles (EV), which rose 58% globally in 2017, according to Darton Commodities. This was primarily driven by China, where 600,000 EVs were sold, compared with 200,000 in the US.
MINING.COM -- Cobalt is facing its first major test since an impending demand boom from electric vehicles triggered a two-year surge, with prices retreating in top consumer China amid signs there’s still enough material to go around.
The price for cobalt sulfate — the chemical form used in car batteries and consumer electronics — fell last week to its lowest since January, and is down more than 20 percent from an April peak, according to researcher Asian Metal Inc. Meanwhile, benchmark cobalt metal is also softening after reaching the highest level in a decade earlier this year, Metal Bulletin data show.
THE BALANCE -- Cobalt, which is primarily extracted as a by-product of nickel and copper ores, is mined in large quantities in the Democratic Republic of the Congo, China, Russia, Canada and Australia.
Cobalt refineries, however, are rarely located near the source mine sites. Instead, major refiners purchase cobalt concentrate from various mines and ship to their own locations.
Here are some of the top producers of cobalt worldwide.
PR NEWSWIRE -- As cobalt becomes increasingly important in powering technology, the U.S. government has identified it as a critical mineral for securing national interests. This reflects a rise in demand that is already affecting a number of companies. First Cobalt Corp. (TSX-V: FCC) (OTC: FTSSF) (FTSSF Profile) is using the opportunity to establish mining and processing facilities in the United States and Canada, powered by a recent merger. Glencore PLC ADR (OTC: GLNCY) continues to benefit from its Katanga mine, which is expected to produce 42 percent more cobalt this year in response to demand. eCobalt Solutions, Inc. (OTC: ECSIF) is developing a fresh source of cobalt in Idaho, increasing America's ability to provide for itself. Demand for the precious mineral comes from tech companies such as Tesla, Inc. (NASDAQ: TSLA), which needs cobalt to power a dramatic rise in production of its electric cars. Tesla is competing for resources with the likes of Apple, Inc. (NASDAQ: AAPL), which is moving towards directly sourcing the cobalt needed for its device batteries
ASIA TIMES -- China’s Responsible Cobalt Initiative (RCI) seems to be picking up steam, with German carmaker Daimler the latest high-profile manufacturer to announce plans to join the campaign led by a Chinese industry group and designed to tackle social and environmental hurdles in the global cobalt supply chain.
Where global commodities are concerned, China has typically been portrayed by commentators as an amoral customer with a seemingly bottomless appetite. With the establishment of the RCI by the aptly named China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters in 2016, Chinese industry appeared to be changing its tune. By spearheading the RCI, China seemed determined to take the lead in ensuring global corporate responsibility throughout a supply chain long criticized for countless human-rights abuses, including child labor.
FORBES -- Despite what Elon Musk claims, the importance of the metal cobalt in the growing electric vehicle market and beyond will continue. Cobalt is a key ingredient used in the lithium-ion batteries that continue to proliferate across a variety of markets. Cobalt now sells for ~$95,000 per ton, compared to $23,000 two years ago, and surging demand for electric vehicles, jet engines, mobile phones, and laptops could lead to major shortages and even higher prices. This year alone, demand for cobalt could increase 40-50%, with use in the battery sector alone exploding 15-20 fold by 2030.
Globally, cobalt production is dominated by the Democratic Republic of Congo, which is a moral problem for consumers: "Carmakers and big tech struggle to keep batteries free from child labor." Congo is a "not free" nation, and a legal tussle over royalties with mining giant Glencore "highlights the nascent electric vehicle sector’s vulnerability, with an escalation seen crippling supplies of the key battery metal." Glencore accounts for more than 25% of the world’s supply, so any disruption that would soar prices even more illustrates how the cobalt market is overly susceptible to the whims/problems of a few.
THE ECONOMIST -- Cobalt derives its name from Kobold, a mischievous German goblin who, according to legend, lurks underground. For centuries it vexed medieval miners by looking like a valuable ore that subsequently turned into worthless—and sometimes noxious—rubble. Once again it is threatening to cause trouble, this time in the growing market for batteries for electric vehicles (EVs), each of which uses about 10kg of cobalt. The source of mischief is no longer in Germany, though, but in China.
REUTERS -- The automotive industry is waking up too late to the fact that China will hold most of the world’s supply of cobalt, a key metal for electric vehicle (EV) batteries, Glencore Chief Executive Ivan Glasenberg said on Tuesday.
“If cobalt falls into the hands of the Chinese, yeah you won’t see EVs being produced in Europe etc. They are waking up too late ... I think it’s because the car industry has never had a supply chain problem before,” Glasenberg told the FT Commodities Global Summit in Lausanne, Switzerland.
REUTERS -- A new mining code was signed into law on Friday by President Joseph Kabila despite vigorous opposition by global mining companies with operations in Congo such as Glencore, Randgold and China Molybdenum.
Royalties paid to the government from cobalt and coltan mining will jump to 10% from 2% previously. Miners of the two metals used in batteries, would have paid a royalty of 3.5 % under the new code if they had not been designated as strategic.
The government considers minerals with the "strategic" designation important for the economic, social and industrial future of the country.
BUSINESS INSIDER -- China has signed a huge deal to secure the lion's share of global cobalt supply — a core component of electric car batteries.
The deal will see GEM — a $4.6 billion company listed on the Shenzhen stock exchange — purchase 50,000 tonnes of cobalt from mining company Glencore over the next three years.
According to the Financial Times, that's equal to half of the world's total cobalt supply in 2017 — and comprises around one third of Glencore's total production estimates through 2020.