Richard Fisher via flickr
Congo produces 54% of the world's cobalt, the metal, which is used in the production of lithium-ion batteries. Congo is the same for electric cars as Saudi Arabia is for internal combustion engines. The most active buyers of raw materials in Congo are almost the same Chinese companies that seek to "crush" the entire chain of supplies of components for electric cars - from the extraction of cobalt to the production and sale of batteries. This is not surprising, since China is the world's largest electric vehicle market. The industry is considered strategic in the country, and local manufacturers of batteries are subsidized by the government.
Chinese companies produce already 77% of all processed from cobalt raw materials. According to the CRU Group, in 2012 they still held a 67% stake. Soon they can achieve an almost monopoly position with 90% of the shares, says CRU analyst George Heppel.
Nevertheless, China still does not control the very extraction of cobalt. The largest mines in the Congo are owned by the Swiss Glencore, which produced 27.4 thousand tons of cobalt there in the last year. The company expects to double its production in the next few years. The remaining 30-40 thousand tons are mined by private traders, or by small Chinese companies, like Molybdenum and Zhejiang Huayou Cobalt.
According to Darton Commodities, the Chinese authorities have formed reserves of 5 thousand tons of cobalt, which is equivalent to 15 days of world consumption. Thus, they want to protect their growing market of electric vehicles. Increasing China's presence in this market can lead to lower prices for batteries, and then - and electric vehicles. However, on the other hand, low prices can hamper the development of new technologies, experts say.
Because of the high demand for lithium-ion batteries from the manufacturers of electric vehicles, the prices for raw materials - lithium and cobalt - have tripled in the last three years due to a shortage of metals. However, the recent large shipments of lithium from Australia can change the situation on the market and lead to lower prices.
Meanwhile, the high demand for batteries for electric vehicles and smartphones has led to a strong rise in the price of cobalt. Since early 2016, it has risen in price on the London Metal Exchange by about 270% to $ 80,000 per ton. Previously, mining companies treated cobalt as waste in the extraction of other raw materials, but now it is unthinkable. Already now, there are companies specializing exclusively in cobalt.
If electric cars are widely spread and new deposits are not discovered, there will be a deficit of cobalt CEO of Glencore, Ivan Glasenberg, is sure. Ford Motor recently announced plans to spend $ 11 billion on electric vehicles by 2022. General Motors, Toyota and Volkswagen are also actively increasing their investment in them. Although now the share of electric vehicles is less than 2% of global car sales, CRU predicts that it will increase to 10% in 2025 and 30% in 2030.
source: wsj.com
Chinese companies produce already 77% of all processed from cobalt raw materials. According to the CRU Group, in 2012 they still held a 67% stake. Soon they can achieve an almost monopoly position with 90% of the shares, says CRU analyst George Heppel.
Nevertheless, China still does not control the very extraction of cobalt. The largest mines in the Congo are owned by the Swiss Glencore, which produced 27.4 thousand tons of cobalt there in the last year. The company expects to double its production in the next few years. The remaining 30-40 thousand tons are mined by private traders, or by small Chinese companies, like Molybdenum and Zhejiang Huayou Cobalt.
According to Darton Commodities, the Chinese authorities have formed reserves of 5 thousand tons of cobalt, which is equivalent to 15 days of world consumption. Thus, they want to protect their growing market of electric vehicles. Increasing China's presence in this market can lead to lower prices for batteries, and then - and electric vehicles. However, on the other hand, low prices can hamper the development of new technologies, experts say.
Because of the high demand for lithium-ion batteries from the manufacturers of electric vehicles, the prices for raw materials - lithium and cobalt - have tripled in the last three years due to a shortage of metals. However, the recent large shipments of lithium from Australia can change the situation on the market and lead to lower prices.
Meanwhile, the high demand for batteries for electric vehicles and smartphones has led to a strong rise in the price of cobalt. Since early 2016, it has risen in price on the London Metal Exchange by about 270% to $ 80,000 per ton. Previously, mining companies treated cobalt as waste in the extraction of other raw materials, but now it is unthinkable. Already now, there are companies specializing exclusively in cobalt.
If electric cars are widely spread and new deposits are not discovered, there will be a deficit of cobalt CEO of Glencore, Ivan Glasenberg, is sure. Ford Motor recently announced plans to spend $ 11 billion on electric vehicles by 2022. General Motors, Toyota and Volkswagen are also actively increasing their investment in them. Although now the share of electric vehicles is less than 2% of global car sales, CRU predicts that it will increase to 10% in 2025 and 30% in 2030.
source: wsj.com