The Cobalt Question: Could Australia Be the Answer?

An increasing number of hybrid and electric vehicles are expected to enter the market in the coming years. Such forecasts are focusing more attention than ever on lithium and cobalt, the raw materials needed to produce the batteries that will power these vehicles.

The boom in electric cars could more than quadruple demand for cobalt by 2030, according to a mining.com article. BMW, for example, plans to offer 25 electric vehicles by 2025, growing the company’s demand for cobalt and lithium 10-fold. VW is targeting a 300-model battery-powered lineup by 2030. The mining.com article cites Bloomberg New Energy Finance data that Volkswagen will invest more than $40 billion in the next five years as part of a push into battery-powered vehicles and autonomous-driving systems. Daimler AG is spending 10 billion euros on 10 battery models by 2022.

Researchers from MIT, the Rochester Institute of Technology, and Gerbrand Ceder at the University of California at Berkeley published analysis, described in an article on azom.com, suggesting that battery production may be slowed but not limited by supplies of cobalt and lithium. The team studied the diversity of the cobalt and lithium supply options in terms of production facilities, geographical distribution, and other variables and found that with regard to lithium, production from brine can be increased to meet the demand much more quickly, as opposed to bringing in the latest underground mine into production. The report acknowledges the difficulties of cobalt sourced from Democratic Republic of the Congo (DRC), but says the major potential cause of delays in acquiring new supplies of cobalt comes from the actual extraction infrastructure, and not from its inherent geographic distribution.

For companies looking to avoid cobalt sourced from the DRC, Australia may provide the answer. Another mining.com article explains that Australia, home to the world’s second-biggest cobalt reserves, is seeing a rush of interest in projects from electric vehicle battery manufacturers seeking supplies from sources other than the DRC. As a result, shares in Clean TeQ – owner of one of the largest cobalt deposits in Australia – as well as Minnows Cobalt Blue , Australian Mines, Artemis Resources and Aeon Metals have all increased, despite the fact that cobalt is more expensive to mine in Australia than the DRC. Australia holds some 1.1 million tonnes of reserves, or 15% of world supply of cobalt, which is mined as a by-product of copper and nickel.