Fast-growing market for electric vehicles lead to supply more cobalt
Business Live reported that the race is on to supply more of the cobalt needed for batteries in the fast-growing market for electric vehicles and that means fresh competition for the big players Glencore and the Democratic Republic of Congo.
A pipeline of projects is looming in places including Australia, the US and Canada after cobalt prices more than doubled in the past year. Glencore produces almost a third of the world’s supply, mainly from the Congo, which is by far the biggest source, accounting for as much as 65%.
Bloomberg New Energy Finance said that among those backing new global developments are billionaire Mr Anil Agarwal and mining tycoon Mr Robert Friedland. They were aiming to capitalize as a battery boom sent demand for cobalt soaring more than 30 fold by 2030.
Mr Sam Riggall CEO of Friedland backed Clean TeQ Holdings, which is developing a USD 680 million cobalt, nickel and scandium project about 350km west of Sydney said that "There’s going to have to be a response that goes beyond Congo.” He added that “Congo’s tight grip on the market is a concern for battery producers to [car] makers. "They are desperately looking for sources of supply outside of Africa."
Mr Franck Schulders, Glencore’s head of cobalt marketing said in an interview the arrival of an era of battery-powered vehicles had already kick-started a period of unprecedented growth for the metal. Volkswagen and Ford were among car makers investing in electric vehicles and the whole market could be worth USD 244 billion by 2025, Goldman Sachs said in a late 2015 report.
Rising cobalt demand and flat supply in the 100,000 tonnes-a-year market opened a 1,500 tonne deficit in 2016 that could triple this year, said CRU Group. There were more than 370 undeveloped discoveries and at least a dozen viable projects outside Congo that could come online by 2023, CRU senior consultant Edward Spencer said in an e-mail.
Cobalt on the London Metal Exchange traded at about USD 32,000 a tonne at the end of 2016, up 36% from the previous year, and has rallied about 65% to more than USD 56,000 a tonne in 2017. That is equivalent to more than USD 25.40 a pound. They were likely to double in 2017 and could remain above USD 20 a pound until the end of the decade.
Source : Business Live