The price of cobalt, an essential component in lithium-ion batteries and super alloys, has been bullish since the tail-end of 2016, with demand from the electric car sector set to grow exponentially. But there’s a shadow over its production with a significant quantity coming from the Democratic Republic of Congo where it has been linked to child labour and human rights abuses. Can the commodity shed its unethical associations in time for the green revolution?
After a prolonged period of relatively low prices, in November 2016 the price of cobalt suddenly spiked and has been on an upward curve ever since.
Editor-in-chief at Platts Metals Daily, Anthony Poole, says the spike in price is likely a result of copper production cutbacks, of which cobalt is a by-product, in Australia and Africa.
“At the moment it looks like cobalt is relatively undersupplied and the demand side seems to be drawing fairly steadily,” says Poole.
In 2015, Swiss-based Glencore announced it would halt copper production for 18 months at its Katanga mine in the Democratic Republic of Congo (DRC) and at another mine in Zambia. Moves like this have undoubtedly hurt cobalt supply but, as demand is unlikely to fall, prices should increase in the long-term.
The aerospace market’s order books are full with long lead-in times and further demand is likely to come from the electric vehicle (EV) market, which is expected to grow exponentially over the next decade.
eCobalt, which owns the Idaho Cobalt project in the US, estimates that by 2020 one-fifth of cobalt demand will come from the EV market.
Considering major car manufacturers such as Ford are announcing new investments and targets for EVs in their production line “that estimate isn’t unrealistic”, says Poole.
For comparison, a smartphone battery contains only 5g to 10g of refined cobalt, but a single EV battery can use up to 15,000g.
Cobalt producing mines can be found in, among other places, Cuba, Zambia, Russia, Australia, Canada and, soon, in Madagascar. As much as 50%, however, comes from the DRC, according to the US Geological Survey.
The region is famously unstable, war-torn and vulnerable to corruption; it ranks 150 on the 2016 Transparency Initiative Corruption Perceptions Index.
The DRC is mostly associated with conflict minerals; however, the majority of cobalt isn’t mined in the violence-riddled areas of North and South Kivu, but in the more peaceful mining province of Katanga.
Nevertheless, production has been mired in controversy.
In April 2016, not-for-profit research organisation The Centre for Research on Multinational Corporations (SOMO) released a report detailing a series of human rights abuses related to copper-cobalt mines in and around Katanga, in the south.
Allegations in the report cover the displacement of communities which are still waiting for mining companies to fulfil their promises of providing clean water and schools for the children.