NewsCentral AfricaStrategic minerals: How electric cars are changing Congo

Tue,18Dec2018

Posted on Monday, 19 November 2018 18:42

Strategic minerals: How electric cars are changing Congo

By Patrick Smith
Cover images/SIPA - Electric cars - the future for mankind - and Congo

The DRC’s control of blue gold – the cobalt used in batteries – could give it a bigger say in global trade

 
Asked about the effects of the global boom in demand for cobalt – a key ingredient in the production of lithium ion batteries for electric cars – a mining expert replies: “Congo wants a cobalt-OPEC given its dominant role as a producer.” The DRC government is being more assertive and decided this year to declare cobalt a strategic mineral and to raise the royalties on its production. Global demand for cobalt is set to quadruple to over 190,000tn by 2026 from a baseline of 46,000tn in 2017 and cobalt prices have more than doubled in the past decade. 
 
A next step might be for a new government to begin insisting that miners begin investing more in the DRC’s industrial and processing capacity so that the country can benefit more from its resources. From the government’s viewpoint, the logic is unquestionable. The DRC has half the cobalt reserves in the world, followed by Australia with 17%, Cuba with 7%, Zambia with 4% and Canada 3.5%. 
 
Congo’s use of its market dominance will work in the short term, says the mining expert, but it must expect the buyers to push back. That is already happening in rich Western countries, which are trying to diversify supplies from countries such as Canada and Australia as well as developing substitutes for cobalt in battery production. There are strict limits on both strategies: Congo’s dominance of cobalt is akin to Saudi Arabia and Russia’s dominance of the oil and gas markets. 
 
Work on developing alternatives to cobalt in lithium ion batteries is in its early stages. Some battery manufacturers are using more nickel and less cobalt, but there are concerns that this will cut performance, a critical matter for the electric car market. Claire Felter of the US Council on Foreign Relations writes that new battery technologies may not be ready for commercial testing for decades.   
 
China Molybdenum and Glencore, the Swiss-based commodity trader, dominate cobalt production and the primary market. They extract the cobalt as a byproduct of their copper mining and sell it to cobalt specialists such as China’s Zhejiang Huayou Cobalt. 
 
The ore is then refined for the battery manufacturers, a field dominated by South Korea’s LG Chem and China’s CATL. China produces over half the world’s refined cobalt and more than 75% of its cobalt chemicals. Congo and China are locked in what could be a mutually-beneficial cobalt marriage. 
 
This article first appeared in the November 2018 print edition of The Africa Report magazine
 
 
 
 
 
 
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