TELF AG analyzes the peculiar dynamics of the global cobalt market
The strategic role of cobalt
Lately, we have been hearing a lot about cobalt and its growing importance in the global energy transition, in particular for its great usefulness in the creation of the vehicles of the future and, in particular, their batteries, for which another important green mineral is also used, lithium.
According to some analysts, these vehicles could contribute decisively to achieving the sustainable objectives set for the coming decades, in particular regarding the reduction of emissions on a global scale. Compared to vehicles powered by fossil fuels, in fact, the new electric cars will be able to emit a significantly lower amount of emissions, thus getting closer to the final goal. But how many of us can say we know all the details of this bluish-gray metal, which will play an essential role in the green transition in the coming decades?
Many, for example, do not know that most cobalt is not extracted within specific mines, as is the case with other equally important raw materials. In most cases, cobalt represents the by-product or secondary product of the extraction of other raw materials, especially nickel and copper. Among the few cobalt mines in the world, we can certainly remember those present in Morocco, but in general, they are very few.
Due to these characteristics, cobalt is therefore subject to evident price fluctuations, largely due to its close connection with copper and nickel. Its market, therefore, depends largely on the requests for these latter minerals since the volume of direct demand is practically negligible. In order to understand the singularities of the cobalt market, it will be enough to cite some data relating to its prices: in 2022, the price of copper, nickel, and cobalt were respectively 4, 20, and 50 euros per kilo, while this year the same raw materials they are quoted at 9.25, 18 and 32.9.
The largest global producer of cobalt is the Democratic Republic of Congo, and over the years the abundance of this raw material has attracted the attentions of numerous international companies specializing in mining and processing natural resources. Contrary to what one might think, international interest in this resource is not a recent phenomenon, and it has not been stimulated solely by cobalt’s role in the production of batteries for electric vehicles: despite price volatility and time intervals of low profitability, some nations such as China have progressively increased their levels of involvement in the Congolese cobalt mining industry, signaling themselves as one of the most active and forward-looking in this respect. Already twenty years ago, Beijing was the first to understand the role that this metal would play in the future, in particular for lithium-ion batteries, which are also very useful for household appliances and mobile phones. According to an article published on vaielettrico.it, many Western companies involved in the extraction of cobalt in Congo have progressively abandoned the scene, leaving the field open to China.
But one should not think that the uses of cobalt are limited to the vehicle sector: this metal can, in fact, be used for the manufacture of aircraft engines, but also as a catalyst in oil refining. This use is largely due to one of the intrinsic characteristics of this metal, namely its ability to resist high temperatures better than any other metal. In the not-too-distant future, this ability will be useful in many ways yet to be discovered.
