The race is on to supply more of the cobalt needed for batteries in the fast-growing market for electric vehicles — and that means fresh competition for the big players Glencore Plc and the Democratic Republic of Congo.
A pipeline of projects is looming in places including Australia, the U.S. and Canada after cobalt prices more than doubled in the past year. Glencore produces almost a third of the world’s supply, mainly from the Congo, which is by far the biggest source, accounting for as much as 65 percent.
Among those backing new global developments are billionaire Anil Agarwal and mining tycoon Robert Friedland. They’re aiming to capitalize as a battery boom sends demand for cobalt soaring more than 30-fold by 2030, according to Bloomberg New Energy Finance.
“There’s going to have to be a response that goes beyond Congo,” said Sam Riggall, chief executive officer of Friedland-backed Clean TeQ Holdings Ltd., which is developing a $680 million cobalt, nickel and scandium project about 350 kilometers (218 miles) west of Sydney. Congo’s tight grip on the market is a concern for battery producers to auto makers, he said. “They are desperately looking for sources of supply outside of Africa.”
“There’s a few new ideas, new mines and junior mining companies. They are all years away from production and they tend to be very small, like fantasies,” said Benedikt Sobotka, CEO of Eurasian Resources Group, which produces copper and cobalt in Congo. “They are not going to make a big difference for our industry.” Projects in Congo from Glencore and Eurasian Resources could potentially add 40,000 tons of mined supply by 2022, according to CRU’s Spencer.
Congo is under pressure to restrict artisanal mining, including in the cobalt sector, which a 2016 Amnesty International report said has a prevalent use of child labor. Tesla Motors Inc., among the largest consumers, undertook in 2014 to only source the metal from North American miners because of supply-chain concerns. Apple Inc. said in March it had expanded responsible sourcing efforts beyond conflict minerals to include cobalt.
There’s work across the cobalt supply chain “to look at provenance, verification and that sort of due diligence,” Anna Krutikov, Glencore’s head of sustainable development, said in an interview. Glencore supports co-operatives in Congo with more than 3,000 members offering people alternative livelihoods to artisanal mining, including in agriculture, she said.
Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.