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COBALT – THE BASICS

COBALT IN BATTERY SUPPLIES

The revolution in battery technology and the concomitant marketing has resulted in an unprecedented demand growth for “all things electrical” from toys to grid storage. This has spurred production throughout various battery manufactures to expand production capacity in the form of “gigafactories”; which of course has resulted in greatly increased demand for key critical commodities such as cobalt. A related issue that affects the supply side, is the social consciousness around cobalt, specifically in that is
estimated 50% is suppled from the DRC and of that a certain amount of that is estimated to be from primary sources incorporating child labour.

WHY COBALT?

End Product – Rechargeable Batteries

Cobalt’s unique low thermal and electrical conductivity properties and key characteristics include of (i) high-energy density, (ii) imparting strength at high temperatures, and (iii) ferromagnetic properties when alloyed with other metals (esp Nickel) make superalloys.

End Product – Superalloys

Metallurgical cobalt is the second largest cobalt market and is used to produce superalloys for industrial applications where heat resistant, surface stability, and corrosive and oxidation resistant materials are required. Typical industries where superalloys are widely used include aerospace, electricity generation, medical, automotive, and military related industries. Other applications include wear hardening tools, catalysts in oil and gas refinement, as well as pigments

SUPPLY

Constraint in supply is likely to persist for some time. Approximately 60 percent of cobalt production comes from the Democratic Republic of the Congo, which present both operating, financial, security and reputational risks for mining companies. Additionally, cobalt is rarely found in high concentrations and is mostly produced as a byproduct of copper and nickel. Limited new investment in these two commodities and only increase supply challenge for cobalt.

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