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Electric vehicle story continues to gather momentum

Metal News - Published on Fri, 01 Dec 2017

Image Source: Reuters
Reuters reported that the electric vehicle story continues to gather momentum, with even major oil companies scrambling to join the coming green energy revolution. But as ever more companies sign up to the bright, shiny EV future, there is rising concern about the heart of darkness in this new technology you can't power an EV without a lithium-ion battery and, for now at least, you can't make a battery without using cobalt.

And most of the world's cobalt comes from the Democratic Republic of Congo a country racked by political instability, legal opacity and, at its darkest, child labour in its mines. This concentration of supply risk, both in terms of physical units and ethical sourcing, isn't going away any time soon and could even worsen.

The DRC accounted for 66,000 tonnes of global mined cobalt production of 123,000 tonnes last year, according to the US Geological Survey. That's the official sector. There is also an artisanal stream of production, some of it using child labour and some of it controlled by insurgent militias.

Quite how much cobalt this grey sector generates is the main "known unknown" in any analysis of world production. But it is an undisputed fact that it has been seeping into the official supply chain for years.

Speaking at a London Metal Exchange seminar in October, Mr Tony Southgate, head of cobalt marketing at Eurasian Resources Group, warned that "it's almost inevitable (...) there are mobile phones in this room" containing cobalt from child labour in the DRC.

The issue has moved to the top of the LME's own agenda after complaints that one of its registered brands, produced by China's Yantai Cash Industrial, could include metal sourced from the dark side of the DRC cobalt sector.

The LME has written to producers asking for assurances on ethical and socially responsible minerals sourcing, while Yantai told the Financial Times that it is conducting its own due diligence exercise.

Frankly, if the rest of the world could, it would happily not source any cobalt from the DRC.

And the likes of Tesla and Apple are trying to do just that, working with potential future producers in Canada and the United States to create their own cobalt supply chains.

There is no shortage of junior miner contestants in this ethical cobalt beauty contest, but right now the DRC is the dominant producer. And it's going to remain so for the foreseeable future.

Six of the top 10 cobalt-producing assets last year were located in the DRC, according to S&P Global Market Intelligence.

In 2022 the number will rise to nine out of the top 10, it forecasts.

Quite simply, unless someone works out how to engineer cobalt out of the lithium-ion battery, the world is going to need a lot more cobalt and it's still going to get most of it from the DRC.

Source :

Posted By : Rabi Wangkhem on Fri, 01 Dec 2017
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