US prosecutors indict Gautam Adani on bribery charges
The billionaire was charged with participating in a scheme that involved paying more than $250 million in bribes to Indian government officials.
Demand for cobalt is set to more than double by 2030 to 388,000 tonnes as the electric vehicle (EV) sector shifts into overdrive, says a new Benchmark Mineral Intelligence report.
The outlook entails compound yearly cobalt demand growth of 10% over the weak 2022 figures, according to the Benchmark agency’s May 10 report commissioned by the Istanbul, Turkey-based Cobalt Institute.
“The industry is optimistic the cobalt market will continue to grow in the coming years, driven by the success of cobalt’s use in superalloys and hard metals, and particularly in EVs,” the Cobalt Institute’s interim director general, Caroline Braibant, said in an email to The Northern Miner.
Braibant said cobalt-containing batteries are essential for EV batteries’ safety, performance and stability – a factor that will continue to define consumer preferences in Europe and North America.
According to the May 10 report, the EV sector is forecast to contribute 89% of demand growth by the end of the decade, up from 40% in 2022, followed by energy storage at 3% and super alloys at 2%.
Despite the rising share of lithium-iron-phosphate (LFP) battery chemistries, cobalt-containing cathode chemistries such as nickel-cobalt-manganese (NCM), nickel-cobalt-aluminium oxide (NCA) and lithium-cobalt oxide (LCO) will be the preferred technology for battery applications – accounting for 59% of total cathode demand in 2030, Benchmark suggests.
“NCM chemistries for EV applications will remain the major driver, shifting to higher nickel and lower cobalt intensities over time. LFP’s share will rise further relative to 2022, reaching a 39% share in 2030. However, we do not anticipate a widespread switch away from cobalt-containing chemistries,” the report reads.
All this demand will require a significant supply response. According to Benchmark, global cobalt supply, both primary and secondary, will exceed 200,000 tonnes this year, and only amount to 318,000 tonnes by 2030, meaning the market will be in deficit by then.
The Democratic Republic of Congo (DRC) continues to dominate as the world’s primary cobalt source, accounting for 73% of mined cobalt supply in 2022. It Is expected to remain the dominant producer, although this share will fall to 57% by 2030.
Braibant said the August 2022 U.S. Inflation Reduction Act (IRA) is likely to reshape the global cobalt supply chain, despite for the moment, neither the major suppliers – the DRC nor Indonesia – are IRA-compliant. Compliant jurisdictions are expected to benefit from the IRA’s proposed financial and tax incentives.
Notably, Benchmark flags Indonesia as stepping up to the supply challenge. Indonesia is the second-largest market by some margin and will quickly catch up with the DRC as a major growth driver.
From 2022 to 2030, Indonesia has the potential to increase cobalt supply by 10 times, compared to the DRC’s output rising by two-thirds, and could account for 37% of the potential mined supply growth from 2022-30, the agency said.
Indonesia became the second largest cobalt producer in 2022, capturing 5% of the global market share and bypassing Australia. It produced 9,500 tonnes in 2022.
Despite not producing any mixed hydroxide precipitate (MHP) before 2021, the quick rollout of new high-pressure acid leach (HPAL) nickel production capacity in Indonesia has meant that cobalt in MHP is quickly becoming a crucial part of the global market. Benchmark forecasts 93% of Indonesia’s potential cobalt growth to 2030 will come from MHP, with the remainder from matte – an artificial nickel-iron sulphide containing 25%-45% nickel that has turned the traditional nickel market on its head.
Investment in Indonesian HPAL capacity is mostly Chinese, although more Western companies are getting involved.
For now, Benchmark expects cobalt supplies will continue to outpace demand, at least until the mid-2020s. The average 2022 price for cobalt in Europe was $31 per lb., peaking at $40 per lb. As of late March, cobalt was trading at about $18 per lb., which price level should persist through the remainder of the year.
The price outlook changes to a more optimistic tone from the mid to late 2020s, Benchmark forecasts, underpinned by an emerging structural deficit as supply growth slows and demand grows quicker.
“With additional supply required to fill the widening forecast deficit, cobalt prices will increase to incentivize investment,” Benchmark predicts.
The agency also flags a divergent pricing mechanism for intermediate battery chemicals and the actual metals market. The latter was traditionally used for trading in all stages of the cobalt value chain.
“With chemical and metal market fundamentals diverging over the last year, given the relatively tight metal market and the intermediate oversupply, the metal price has often failed to represent the overall market balance. As such, alternative pricing methods are emerging in the hydroxide market, which avoid referencing the metal price,” the report reads.
