Supplies of cobalt, a key element of the positive terminals in lithium batteries as well as other electronic components, have tightened in recent months due to logistical disruptions in South Africa, where an economic shutdown froze economic activity earlier in 2020.
At the same time, demand for the blue metal is rising as the world craves more batteries, more electronic devices, and more electric cars.
A cobalt shortage already is hampering the auto production industry’s recovery, the Wall Street Journal reported last week.
The spot price of cobalt has climbed about 20 percent since 31 December to $38,520 a ton on 21 January, the Journal noted.
Most of the world’s cobalt is mined in the Democratic Republic of Congo, then shipped overland to South Africa’s port of Durban. From there, more than 40 percent of it goes to China for initial processing before being sent to battery makers.
With almost all of the world’s cobalt supply chain flowing through just three countries, inventories remain at the mercy of logistical or political disruption or manipulation.
“It’s very easy for countries like China to dominate the cobalt market because it only needs to be in control of a limited number of mines” to skew the market, Julia Kinnard, a professor of economic geology at the University of Witwatersrand, commented to the Journal.
In a sign of cobalt’s key place in China’s industrial strategy, foreign minister Yang Li visited Congo earlier this month to announce additional aid to the struggling African country.
Investments in Congo by more than 80 Chinese companies have created at least 50,000 jobs there, the Congolese government has reported.
China is hoarding about 5,000 tons of cobalt for its industries to use this year, according to research by Roskill, a consulting firm.
Worried about China’s possible market dominance, manufacturers in other countries are searching for new supplies and developing ways to reclaim cobalt from used products.
Researchers also are making progress in creating cobalt-free power cells. (See “New Supercapacitor Could Replace Batteries,” Trends Journal, 12 January 2021.)