The governor of the Central Bank of Nigeria (CBN), reacting to calls by citizens to take drastic action against the free fall of the naira against ... the US Dollar, was quoted in a report saying: "Domestically, there has been zero dollar remittance to the country’s foreign reserve by the NNPC. Monetary policy alone cannot bear all the burden of the expected adjustments needed to manage all these difficulties. It’s our collective duty as Nigerians to shore up the value of the naira.’’
VW, Tesla, and the Chinese EV giant BYD (the world’s second-largest EV maker) have all either developed new cobalt-free batteries or are in late-stage development.
This is potentially very bad news for the Democratic Republic of Congo (DRC) that is home to approximately 60% of the world’s known cobalt reserves.
Presently, the DRC is failing to do much to capitalise on the extraction of this strategic metal, given that the bulk of its mining operations are controlled by foreign, predominantly Chinese, companies.
Why do automakers want to stop using cobalt in their EV batteries?
An explanation in 3 Cs:
- Cost: EV batteries are made with a combination of minerals and metals including cobalt, nickel, lithium, manganese, aluminium and iron. But cobalt is by far the costliest. The blue metal makes up 20% of a standard EV battery and at $45,000 a tonne that forces up the price of the vehicle. For VW’s new ID.4 EV, the cobalt only adds $850 to the sticker price.
- China: Automakers have suffered mightily this year due to the semiconductor shortage and are doing everything they can to ensure that other vital components in their supply chains do not suffer similar constraints. But given that China is the dominant actor in the global cobalt market, controlling an estimated 40% of the extraction in places like the DRC, and of the processing, Beijing could leverage its position to cut off the supply to US and European automakers as it did with rare earths exports to Japan in 2010.
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- Children: There is growing public awareness in the US and Europe about the horrific conditions in the DRC’s cobalt mines where the problem of child labour is well-documented.
- This is problematic for automakers who are building their burgeoning EV businesses on the premise that their vehicles are better for the planet. But if better for the planet focuses just on air quality and the environment rather than people, those brands could become the targets of social media campaigns.
This article was first published in the China Africa Project.
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