Cobalt Markets
- Cobalt is an Energy Metal with >50% of consumption in rechargeable batteries – up from 1% of market in the mid 1990’s
- Other uses in super alloys for aerospace, hard metals, pigments, catalysts, agricultural as well as food additives
- 2016 mine production was approximately 117 000 metric tons
- Out of this mine production 105 000 tons was refined to saleable products
- The compound annual growth rate (CAGR) over the past 20 years showed a 6% market growth leading to the current deficit experienced
- Various market analysts (for example, Exane BNP Paribas) forecast an overall cobalt market of 300 000 tons by 2025.
- 98% of non-artisanal production of cobalt comprise a by-product of the copper mining (DRC, Zambia) and nickel mining (Australia) where primary metals dictate economics
- 60 percent of the world’s cobalt reserves and resources originate in the DRC, a country not easily accessible by Western Companies. In addition, approximately 97 percent of the world’s supply of cobalt comes as a by-product of nickel or copper. However, the price of the two other base metals have been plunging, to reach in 2016 six-year lows, making many deposits uneconomic. – Therefore, the Cobalt supply is expected to remain constrained.
- Few primary cobalt mines have been identified globally and are expected to enter production within the next 3 years.
- On the other hand, Cobalt’s role in Li-ion battery cathodes to increase energy density is expected to continue!
- EVs provide compelling story for cobalt demand before even considering growing demand in consumer electronics & stationary storage
- CRU predicts a 250% increase in demand for Li-ion batteries for EVs and 75% across other energy storage applications
- Bloomberg New Energy Finance estimates 35% of all vehicles by 2040 will be electric, up from 1% in 2015
- Growing demand, supply uncertainty & responsible sourcing concerns are creating an opportunity for a cobalt boom
