the iReport published by the Cobalt Institute on May 17, shows that, for the first time, the demand for cobalt for the batteries of electric vehicles last year surpassed that of mobile phones and other portable devices. The industry needed 59,000 tons of this metal, which is a 34% of the total world market share. These data explain that the price of cobalt has tripled since the beginning of 2021a trend that has been accompanied by three other very important metals in the composition of batteries: lithium, nickel and copper.
According to the report, the total global demand for cobalt in 2021 reached 175,000 tons. Of these, mobile phone manufacturers consumed 26,000 tons, while in laptops and tablets the amount needed was 16,000 tons. The total figure demanded contrasts with the 160,000 tons extractedwhich means a trade deficit 15,000 tons in a single year.
In this scenario, it is not surprising that the prices of cobalt, nickel, lithium and copper have skyrocketed. The price of cobalt has almost tripled since the beginning of 2021. The price of nickel rose so high in March that the London Metal Exchange (LME) had to suspend its trading.
The report reveals one of the biggest problems What the automobile industry faces with electrification: the lack of metals for batteries. Manufacturers have responded by using other types of batteries with other chemical compounds, such as LFP batteries (lithium iron phosphate) that do not require cobalt or nickel. However, this circumstance hardens the lithium market itself, whose spot prices have doubled since the beginning of the year.
Benchmark Mineral Intelligence estimates that the global lithium industry needs investment of up to $42 billion by the end of the decade to meet demand for electric vehicle batteries. The MINING.COM Metal EV Indexwhich tracks the value of metals from batteries in newly registered passenger electric vehicles (including conventional, plug-in and 100% electric hybrids) around the world, totaled it to 1$.5 billion in Decemberwhich represents an increase of 192% compared to the same month of 2020.
“Ensuring access to raw materials is crucial if the world is to achieve a sustainable and just transition to a greener future,” said David Brocas, Director of Cobalt Trader at Glencore and Chairman of the Executive Committee of the Cobalt Institute. “Cobalt’s role in batteries and recycling makes it one of the climate-critical materials.”
Cobalt production, in the hands of very few
Cobalt, which is a by-product of copper and nickel mining, constitutes only 0.001% of the earth’s crust. Its appeal to electric vehicle manufacturers comes from the fact that it provides batteries with a high energy density, which increases the range of their vehicles and prolongs their useful life.
The supply comes mainly from the Democratic Republic of Congowhere production is dominated by miner and commodity trader Glencore as well as Chinese companies.
The Cobalt Institute expects cobalt demand to continue to grow to 320,000 tonnes per year over the next five years, almost double the total consumed in 2021, with electric vehicles responsible for 70% of this growth. He also sees supply picking up this year and next, which should lead to a more balanced market. From 2024, the availability of cobalt will decrease again, since its growth will be limited to 8% per year, compared to the 12% that the demand will grow, which will generate significant deficits.
