LONDON, July 12 (Reuters) – Cobalt is back in the headlines for all the wrong reasons. The death last month of 43 artisan miners at the Kamoto Copper Company KOV concession in the Democratic Republic of Congo has refocused attention on the human cost of producing what is a key input into electric vehicle (EV) batteries.
The KOV concession is majority-owned by a subsidiary of trading and mining group Glencore. The official response to the incident – sending the army to clear around 20,000 “illegal” miners from the area around the mine – merely underlines the problematic nature of the world’s dependence on Congo for its supply of cobalt.
The country accounted for around 64% of global mined production last year, according to the United States Geological Survey (USGS). The latest incidents will do nothing to reassure automotive companies about the future stability of sustainable supply and will incentivise them further to try and reduce the amount of cobalt in EV batteries.
However, for now they’re stuck with the stuff since nickel-manganese-cobalt chemistry remains the bedrock of passenger vehicle batteries, albeit with varying composition ratios. And that means they’re stuck with the Congo’s artisanal miners, who collectively represent the cobalt market’s swing capacity.
So-called swing producers are those operators that enter production during periods of high prices and depart when prices are low. In many industrial metal markets swing capacity comes from the small-scale mine sector in China or scrap, which is notoriously price sensitive.