Cobalt Critical to Lithium-ion Battery Chemical Mix

Skyrocketing prices for cobalt and lithium have led Asia’s top battery makers to consider adjusting the formula for lithium-ion batteries used in electric vehicles (EVs) by swapping a portion of the cobalt for more nickel.

However, industry experts say the world’s leading auto manufacturers’ aggressive plans to expand their electric vehicle offerings in the face of unstable access to cobalt supply is likely to offset any negative impact this might have on the market.

Cobalt fundamental to EV battery chemistry
Cobalt prices have risen nearly 280 percent from their low point in February 2016 to hit an eye-popping US$82,000 per tonne as of February 15, 2018.

The rising price of cobalt — and lithium — has directly impacted battery cell pricing for tier-one cell manufacturers on the order of 8 to 12 percent, Benchmark Mineral Intelligence analyst Caspar Rawles told the Investing News Network.

Spurred by the dramatically rising price of battery materials, some large-scale cell manufacturers have begun to study alternative cathode formulas that use more nickel and less cobalt. The standard recipe for the preferred nickel-manganese-cobalt (NMC) lithium-ion batteries consists of 60 percent nickel, 20 percent manganese and 20 percent cobalt. But South Korea’s SK Innovation (KRX:096770), for example, has said its goal is to change up that 6:2:2 ratio in the cathode composition to 8:1:1 in an “[effort] to respond to changing market conditions.”

Similarly, Beijing Easpring Material Technology (SZSE:300073) in China is looking to disrupt cathode composition with strategic partnerships with Clean TeQ Holdings (ASX:CLQ,TSX:CLQ) on its Sunrise nickel-cobalt project and Global Energy Metals (TSXV:GEMC,FWB:5GE1) with its assets in Australia and Canada.

Cathode, cell and EV manufacturers are keen on reducing the cost of the cells, but reducing the amount of cobalt in each cell and increasing nickel isn’t the easiest answer. “There are still a number of engineering challenges that will need to be overcome in order to be able to use high-nickel/low-cobalt formats for EVs,” Rawles pointed out. “Whilst there is a big push to move towards NCM 811, the technologystill needs to be developed and then rigorously tested to be able to be deployed on a mass scale. This will take time and the transition to the technology will be relatively slow.”

And it seems cobalt is so essential for optimal performance that it isn’t likely to disappear from the lithium-ion battery story anytime soon. “If you increase the nickel proportion, you reduce the stability of the battery and so it has an impact on cycle life, the ability to charge it fast,” according to Umicore Chief Executive Marc Grynberg. “Cobalt is the element that makes up for the lack of stability of nickel. There isn’t a better element than nickel to increase energy density, and there isn’t a better element than cobalt to make the stuff stable. So [while] you hear about designing out cobalt, this is not going to happen in the next three decades. It simply doesn’t work.”

Rawles said Benchmark expects the cobalt market to see continued significant growth as increasing sales volume for EVs will negate any decrease in the average density of cobalt in battery cells.

“To put that into numbers, we see the average cobalt content across all cobalt-containing lithium-ion cathodes (LCO, NCM and NCA) decreasing by 60 percent from 2017 levels by 2025; at the same time, the demand for cobalt from lithium-ion batteries will grow nearly three times,” he explained.


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Global Energy Metals Corporation (TSXV:GEMC) is focused on offering security of supply of cobalt, a critical material to the growing rechargeable battery market, by building a diversified global portfolio of cobalt assets including project stakes, projects and other supply sources.