I had a very enlightening conversation on Wednesday morning with the experts at Darton Commodities Limited, a U.K.-based metals trader that specializes in cobalt and serves as an intermediary between cobalt producers and European users. A couple days before the call, Darton sent me a copy of their 42 page “2015-2016 Cobalt Market Review.” It was one of the most impressive and data rich industry overviews I’ve ever seen.
Our wide ranging hour and a half conversation confirmed my developing thesis that cobalt is an immense supply chain risk that lithium-ion battery manufacturers and users have blithely dismissed in a headlong rush to build production capacity for markets that may not develop, or may develop more slowly than anyone anticipates. It left me more convinced than ever that my initial risk assessments were understated.
The Cobalt Cliff is upon us and there is no reasonable probability that the battery industry will have the muscle to outbid other essential industries that must have cobalt to make far more valuable products. Continue Reading →