China then processes ~70% of global intermediates producing cobalt metal or cobalt salts (for use in batteries). The top 5 cobalt producers control ~53% of global supply, typically sourced from DRC based operations. The Democratic Republic of the Congo (DRC) produces 71% of cobalt today.
Cobalt produc- tion is thus incentivised by firmer nickel or copper prices, rather than on its own price cycle. Nearly all cobalt produced in the world is a by-product of either nickel or copper mining (5-15% of mine revenues). Consensus estimates predict that EVs and internal combustion engine (ICE) vehicles will reach price parity by 2024. A key decision point for the take up of EVs remains ownership costs. Global EV sales reached 6.75 million units in 2021, +108% vs 2020. The combination of EV purchase subsidies (part of post-COVID economic stimulus in the EU and China) and the pandemic-driven shift in consumer spending patterns significantly accelerated demand in 20. While cobalt is present in most portable devices that are part of daily lives, in 2021 EVs surpassed electronics as the major source of demand.
Consumer electronics, electric vehicles (EVs) and energy storage systems (ESS) are the dominant uses for lithium-ion batteries. The most significant driver of cobalt demand in the coming decade will be lithium-ion batteries.
#COBALT ORE DENSITY DRIVERS#
Old economy drivers are typically industrial uses that include steels, tools, industrial chemicals and magnetic materials. New economy drivers include lithium-ion batteries and superalloys. Cobalt is an important raw material, with its demand split into new and old economy drivers.
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