In the past year, for the first time in history, electric cars have emerged as the main consumer of cobalt, a rare metal used in lithium-ion batteries. According to a report by the Cobalt Institute, it is noted that the automotive sector has overtaken smartphones and personal computers as the main market for cobalt.
The automotive sector consumed 59,000 cobalt last year. This industry represented 34 percent of the total demand for the metal. This was due to a doubling in sales of electric and hybrid cars compared to the previous year. Smartphones fell to second place with a consumption of 26,000 tons, followed by laptops and tablets with 16,000 tons.
Supply and demand
The total demand for cobalt last year was 175,000 tons, while the mines produced 160,000 tons. “This gap in supply and demand represents one of the biggest challenges facing the automotive sector in their transition to electric mobility,” notes the British business newspaper Financial Times. “It must be possible to secure sufficient raw materials.”
“As electricity production increases, concerns about potential supply problems with critical battery materials – such as cobalt, lithium or nickel – increase. In four years’ time, the car sector will probably account for half of total cobalt sales.”
“Cobalt production is considered to be particularly problematic,” the Financial Times said. »The metal is a by-product of the extraction of copper and nickel. After all, the supply is highly concentrated. ”
“Almost three quarters of world production comes from the Democratic Republic of Congo, where activity is dominated by Chinese companies and the British group Glencore. Congo was by far the largest producer with a volume of 118,000 tonnes of cobalt last year. Australia followed in second place with 5,600 tonnes. “
This situation has also sparked some speculation, including the possibility of a mining company being taken over by a major automaker. Elon Musk, CEO of automaker Tesla, recently made it clear that he did not rule out the idea.
Tesla will address any restrictions that could slow the transition to renewable energy, “Musk said.” Tesla has no specific intention to buy a mining company, but if this is the only way to speed up the transition, there will be no doubt about it. ”
Tesla aims to produce 20 million electric cars annually. Last year, one million copies were produced.
The Financial Times further points out that in China, an increasing number of electric cars are powered by cheap lithium-iron phosphate batteries, which generally have limited range and exhibit poor performance.
But the top models in the US and Europe still use nickel and cobalt batteries. Three-quarters of the electric cars sold worldwide last year were equipped with this type of battery.
The Cobalt Institute expects global demand for cobalt to reach 320,000 tonnes in five years. After all, these stocks must cover a sharp increase in production in the electric car market. “The supply of cobalt is likely to increase until the end of next year, which will allow a better balance in the market,” the experts claim.
“But after that, there are fears of a delay, which could lead to major shortcomings. Demand for cobalt will increase by about 12 percent per year, but in the supply case, growth will be limited to 8 percent per year.
Last year, a pound of cobalt on the market had to pay a price of $ 32. It was a doubling compared to the previous year due to strong demand from the automotive sector and supply disruptions. Currently, a price of $ 37 per. pound.