How elec­tric cars are chang­ing Congo

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

The Africa Report - - FRONTLINE -

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.

Elec­tric cars: the fu­ture for mankind - and for Congo

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