The rise of cobalt
Having risen in line with the proliferation of portable devices, the demand for cobalt could accelerate further with wider production of electric cars. Simon Frost reports.
Despite a slow start for the metals market this year, demand for cobalt is set to grow significantly in coming years, according to speakers at NiCoMo 2015, which was held in London this February.
Cobalt is used widely in cathodes for lithium-ion batteries, as well as for improving the oxidation capabilities of nickel in nickel-cadmium and nickel metal hydride batteries.
Global demand for the transition metal has almost doubled in the last decade, from 42,500 tonnes in 2003 to more than 80,000 tonnes in 2014. As Mark Seddon, Senior Manager at Argus Media Consulting, said, the growth is ‘almost all due to the rise of the battery industry’. In 2013, 42% of the demand for cobalt was for end-use in batteries, compared with 23% in 2007.
Seddon forecasts a 10% annual increase in demand for cobalt in the battery sector over the next five years, based partly on ‘relatively conservative’ expectations for the popularity of electric vehicles. And, if predictions described by Claude Chanson, General Manager at RECHARGE, Belgium, are to be believed, conservative is the right word. Chanson presented a forecast calculated by energy consultant Avicenne, which envisaged a 290% increase in demand by 2025. If true, 87,000 tonnes of cobalt would be required for the battery sector alone that year.
Tony Southgate, Cobalt Product Manager at ENRC Marketing, noted that ‘cobalt does the best job – it gives the best power for its size of any metal, and applications such as laptops and mobile phones are driven by the consumer. You want to recharge a phone once a day at most rather than have a battery that’s £10 cheaper but has to be charged twice a day. The demand for cobalt is underpinned by its performance rather than the price.’
Nick French, Manager at SFP Metals UK Ltd, added that the price of cobalt could fall. ‘If you believe what Tesla says, when it goes into mass production of battery units from the Gigafactory in Nevada, by the end of this decade, Tesla is going to reduce the cost of the batteries by around 30–40%, so the cost factor will go away.’
It’s not only the battery sector that is adding to the demand for cobalt. The second-largest share of the total end-use of cobalt, accounting for 19% of total demand, is in the production of superalloys – high-performance metals that are crucial in aerospace and marine applications. ‘With more aircraft being made, more cobalt is required, so we’re seeing a very strong demand for cobalt in the two largest sectors,’ said David Weight, General Manager of the Cobalt Development Institute.
But while demand looks sure to increase, supply is ‘somewhat fragile’, said Southgate. ‘Cobalt doesn’t really fit the normal economics of supply and demand, because it’s a byproduct – it’s wholly dependent on the nickel and copper markets.’ The British Geological Survey’s risk rating for cobalt is 7.6 (out of 10).
The biggest producer of cobalt is the Democratic Republic of Congo, accounting for 36% of the reserves base, while Australia and Cuba each have 14%. Global reserves are estimated at 7.2Mt, with 120,000t produced annually. French stated that production has to step up over the next few years, predicting that supply is likely to be in deficit as early as 2016.