The demand for cobalt is now directly correlated to the growth of lithium-ion batteries and electric vehicles. According to Argus Media, the battery industry’s cobalt demand in 2018 grew 102% from 2017, to 16,629 tonnes. Simon Moores, managing director of Benchmark Minerals, told the US Senate he thinks that cobalt demand will quadruple by 2028, as EV market penetration deepens. Benchmark projects global cobalt demand at 276,401 tonnes by 2028 – more than double the 105,000 tonnes of refined cobalt produced in 2017. Returning to our electrification forecasts, 14 million EVs on the road by 2025 will require almost half (45%) of current annual cobalt production. The largest cobalt producer is the DRC, at 90,000 tonnes. All the other producers combined produce just 43,000 tonnes – ie. <63,000t required for 14 million EVs. And that’s the low-end scenario. Mining companies in the DRC and elsewhere will either have to significantly scale up production – notwithstanding big tech companies wanting to stay away from the “blood cobalt” DRC – or new deposits have to be found which will take several years to develop. If either fails to occur, demand is sure to outstrip supply. Cobalt prices will continue to rise – to the chagrin of battery – and EV-makers – who will pass on the higher costs to EV buyers. This if from an article written by Richard Mills on Ahead of the herd website.
