SMM11, March 26: the upcoming electric vehicle boom will significantly increase demand for cobalt in the European Union and around the world. According to a new JRC report, demand for cobalt is expected to exceed supply by 2020, and the EU must take measures to increase supply and curb demand without hampering the growth of electric vehicles.
With the global stock of electric vehicles expected to rise from 3.2 million in 2017 to 130 million in 2030, total demand for cobalt is likely to triple over the next decade, surpassing supply in 2020.
The EU produces about 2300 tons of cobalt a year, and demand is already about nine times higher. With the gap between supply and demand expected to widen over the next decade, the EU will continue to rely on imports for the foreseeable future.
On average, the report predicts, demand will exceed supply by 64000 tons by 2030. The cobalt supply chain is at risk of concentration interruption. Because of the high concentration of cobalt, the global cobalt supply chain is very fragile. On the one hand, more than half of the global supply (126000 tons) is exploited in the Democratic Republic of the Congo. On the other hand, China produces almost half of the world's refined cobalt.
According to the JRC report, these risks will persist in the future, increasing in the short term, but are likely to decrease between 2020 and 2030, as ongoing exploration projects are likely to add new suppliers and diversify the market. Rising prices may affect battery production. The price of cobalt tripled between 2015 and 2018. The continuing trend could seriously affect battery manufacturing, as cobalt accounts for a large part of the cost of production. Technically, it is possible to replace cobalt with other metals, and demand for electric car manufacturing could be reduced by nearly 30 per cent. In the medium to long term, however, alternative measures are not sufficient to address imbalances. As the EU continues to develop its battery manufacturing capacity, it is essential to ensure sustainable access to an adequate supply of cobalt. The report stresses the importance of EU initiatives, such as the raw materials initiative pillar and the European Battery Union, and recommends concrete actions to improve the cobalt market in the future, for example, by improving regulatory conditions, Promoting the exploitation of cobalt and attracting private investment in mineral exploration; Consolidate trade agreements with countries such as Australia and Canada, whose importance as cobalt producers is expected to be highlighted in the future; ensure that old batteries, including those in plug-in hybrid vehicles, are recycled to facilitate cobalt recovery; Explore ways to introduce the chemical composition of low cobalt batteries and cobalt-free alternatives to the market; and monitor the supply and demand of metals that may replace cobalt (such as nickel).
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