Governments and organizations all over the world are investing in green technologies to reduce carbon emissions as much as possible. Cobalt is a necessary raw material for modern, high-performing batteries. Let’s understand how cobalt is powering the EV industry.
In 2050, the demand for cobalt is anticipated to rise by up to 403%. For the first time in 2021, electric vehicle (EV) batteries surpassed all other battery-related uses 31%, industrial metals 14%, and industrial chemicals 11%, to become cobalt’s largest single end-use 34%.
74% of the world’s EV battery industry was made up of cobalt-containing battery chemistries.
Many automakers prefer cobalt-containing EV batteries as their preferred technology, partly because of their higher performance and recyclable nature. Batteries made of lithium-nickel-cobalt-oxide (NMC), nickel-manganese-cobalt-aluminum (NMCA), or lithium-nickel-cobalt-aluminum (NCA) make up the majority of contemporary EVs. Three-quarters of all EV batteries sold worldwide in 2021 were cobalt-containing batteries. In the medium term, EVs are anticipated to account for 70% of market growth, increasing the demand for EV batteries.
In 2050, 67% of battery cobalt in the EU may come from recycled sources as the market for EV batteries expands and recovered cobalt increasingly meets the current need. To keep up with the market, more recycling capacities are required. Cobalt recycling helps create a smart, circular world in which the environmental impact of producing things is reduced.
In 2021, EVs overtake other factors as the main growth drivers for cobalt demand.
The demand for cobalt is still rising. According to the Cobalt Institute’s Cobalt Market Report, the cobalt market had an exceptional 22% spike in demand in 2021. Looking ahead, the demand is anticipated to rise to around 320 kt from 175 kt in the next five years.
In addition to being eternally recyclable, cobalt is one of the essential minerals for a circular economy. Currently, it is estimated that 8% of cobalt will come through recycling.
By 2026, EVs will account for half of the demand for cobalt, and the EV market will have a significant impact on growth in the years to come. To be ready for the transition to a greener economy, more vehicle manufacturers are investing in cobalt-containing EV batteries, as evidenced by the fact that in 2021 EV batteries became the largest single usage for cobalt (34%).
A by-product of large-scale copper and nickel mines is cobalt. Currently, the Democratic Republic of the Congo (DRC), where 74% of it is mined, is the primary source of cobalt. The DRC generated about 118 kt in 2021, and Australia came in second with 5.6 kt produced in the previous year.
With each generating about 3-5 kt of cobalt in 2021, Cuba, Russia, the Philippines, and Canada are also significant sources of cobalt. The DRC will lose a little percentage of the worldwide market share over the next few years, but will still hold a market share of over 60% due to increased supply anticipated from nations including Indonesia, the US, New Caledonia, and Canada.
Most uses, including EV batteries, require refinement of cobalt once it has been obtained and processed. Cobalt metal that has been refined can either be utilized directly for a variety of purposes or transformed into various cobalt compounds (such as cobalt salts and oxides), which have a wide range of uses. To reach 144 kt in 2021, the primary refined supply—which includes both metal and chemical products—grew by 17.9 kt.
72% of the main production is refined in China, which also accounts for the majority of the refining (104 kt in 2021). Finland refines 14 kt, or 10% of the supply, making it the second-largest refiner.
For a transition that is green and sustainable, artisanal mining needs to be formalized.
While the vast majority (80–90%) of DRC cobalt is produced by large-scale miners that operate ethically and under formalized settings with salaried workers, there is an artisanal mining industry that has raised ethical questions. As artisanal mining is a lifeline for many families who rely on it to pay for food and education, it is crucial to formalize it to put a stop to bad practices and give people a means of support.
The DRC is already taking steps to formalize the industry and enable it to keep helping to reduce poverty in secure, official settings that forbid unlawful activities like child labor and forced labor. The Democratic Republic of Congo government authorized the Entreprise Générale du Cobalt (the EGC) to create a new “Responsible Sourcing Standard” paper in March 2021 that highlighted their intended formalization of the ASM sector in the DRC.
The cobalt sector is adamant about cooperating with the DRC to guarantee that cobalt is produced ethically. Artisanal mining in the DRC is being legitimized through several projects and initiatives, including the Global Battery Alliance, Responsible Minerals Initiative, Fair Cobalt Alliance, and others.
For instance, the Fair Cobalt Alliance (FCA) is working locally to transform artisanal mining into a driver of development, while the Global Battery Alliance is assisting in the establishment of a sustainable battery value chain. The Cobalt Institute seeks to advance ethical cobalt mining in the DRC in conjunction with all of those activities.
Environmentally friendly technology require cobalt.
Although EV batteries account for 34% of the cobalt used, this is not its only usage. Other environmentally friendly technology, including wind turbines, also require cobalt.
Wind energy, one of the most rapidly expanding types of renewable energy, uses cobalt and could supply 35% of the world’s electricity by 2050.
The generator needs a magnetic field to produce power.
The magnetic field is produced by permanent magnets in the generator without the need for electricity, enabling the turbines to operate at lower wind speeds while still producing energy. Cobalt is a key component of the strongest permanent magnets and is used as an ingredient in wind energy.
In addition, cobalt is used in catalysts for oil processing to remove contaminants from crude oil and lower sulphur emissions from maritime sources. While unrelated to the green transition, cobalt is also a component of vitamin B12, making it crucial for both human and animal nutrition. It is also utilized in superalloys in machinery like jet turbines where high-temperature strength is crucial, medical devices, and high-performance tools for cutting metal parts.
To achieve resilient cobalt supply chains and zero-emission mobility, the public and commercial sectors must work together.
Cobalt is necessary for EV batteries and other green technology, therefore combating climate change depends on it. As a result, cobalt will be in higher demand in the upcoming years. However, the demand for cobalt in the near and medium term will be mostly based on primary cobalt, which is primarily derived from the DRC. Governments and businesses must work together to guarantee that supply chains are resilient, transparent, and sustainable. This applies not only to sourcing but also to the forthcoming recycling issue since this area needs to be equipped with additional recycling capacity.
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