Rahul Verma is a research scientist associate in the Bureau of Economic Geology at the University of Texas at Austin. Brent A. Elliott is an economic geologist in the Bureau of Economic Geology at the University of Texas at Austin.
As we move toward integration of renewable energy sources and electric vehicles, we need to pay greater attention to the cobalt supply chain and diversification of supply for cobalt sources.
Cobalt plays an integral part in the common lithium-ion battery, and as battery-powered applications such as electric vehicles become ubiquitous, cobalt mining will need to grow proportionally to avoid supply bottlenecks.
Industry projections show that if we reach 24.7 million cars by 2025, we will need the cobalt supply for a compound annual growth rate of about 8 percent from 2020 to 2025. If demand is higher, such as upward of 63.2 million cars by 2025, it will require a growth of about 14 percent from 2020 to 2025. Such growth rates hinge on a precarious supply chain.
The foremost risk, and perhaps the most challenging to solve, is geopolitical. Sixty-two percent of the world’s cobalt comes from the Democratic Republic of Congo, and combined with production from Zambia, Madagascar, South Africa and Zimbabwe, the five countries mine more than 71 percent of the world’s cobalt.
Companies process ore locally and export more than 90 percent of the total to China for further processing and refining to produce commercial cobalt compounds used in batteries.