Lithium-ion batteries require lithium, graphite and cobalt, among other components, and demand for these metals is expected to surge as electric vehicles become more mainstream. Anticipated demand and limited supply have led to strong gains for cobalt in particular this year, and investors are becoming more interested in this metal.

68% price increase
January 2017 April 2018

Cobalt Applications

Global Cobalt demand by industry (%).

Cobalt is used in many alloys (superalloys for parts in gas turbine aircraft engines, corrosion resistant alloys, high-speed steels, cemented carbides), in magnets and magnetic recording media, as catalysts for the petroleum and chemical industries, as drying agents for paints and inks.

Cobalt blue is an important part of artists palette and is used by craft workers in porcelain, pottery, stained glass, tiles and enamel jewellery.

EV Battery Thematic

Cobalt expected to be a big winner

  • NMC batteries favoured by the EV industry
  • Cobalt concentrations need to be maintained in NMC batteries to stabilise Nickel
  • Hight Nickel concentration decreases thermal stability and lifespan of the battery
  • Suggested that c.20% of Cobalt is needed for stabilisation

Cathode active material allocation

2016 1


2025E 2

1) BMO Research: The Lithium Ion battery and the EV market. Feb 2018
2) UBS Research: UBS Nickel – How we can supply the electric vehicle market, Nov 2017

Minimum Cathode materials for NMC batteries


CathodeKey characteristics 
NMC
(Ni, Mg, Co)
High energy density
Different chemical ratios
Nissan logo Mitsubishi logo Renault logo Ford logo
NCA
(Ni, Co, AI)
High energy density
Low safety profile, high cost
Nissan logo Tesla logo
LFP
(Li, Fe, PO)
Low energy density
Very stable, long life span
 
LMO
(Li, Mg, O)
Low energy density
Very stable, low life span
 
LCO
(Li, Co, O)
High energy density
Very low safety profile, explosive in EVs
 

NUMBER 1 Cobalt mining and exploration Country

  • Congo (DRC) 64,000
  • Russia 5,600
  • Australia 5,000
  • Canada 4,300
  • Cuba 4,000
  • Philippines 4,000
  • Madagascar 3,800
  • Papua New Guinea 3,200
  • Zambia 2,900
  • New Caledonia 2,800
  • Source: Cobalt Investing News 2017

Democratic Republic of Congo (DRC) Mine production: 66,000 MT The DRC is the world’s largest producer of cobalt, accounting for roughly 60 percent of global production. The country has been the top producer of the metal for some time. The DRC’s output in 2016 increased by 3,000 MT compared to 2015.

According to Mining Weekly, the DRC will receive increasing amounts of foreign investment in the coming years, mostly from China, as a result of its low production costs and high-quality minerals.

But cobalt mining in the DRC has also been related to human right abuses — earlier this year, Apple (NASDAQ:AAPL) announced that it has temporarily stopped buying cobalt mined by hand in the DRC.