The Elements of Innovation Discovered
The Elements of Innovation Discovered
Critical Minerals Alliances 2024 - September 16, 2024
Cobalt is found in plants, fish, and is essential to mammals in the form of cobalamin, or vitamin B12.
The famous cobalt blue color is created by mixing cobalt oxide with alumina. Altering the concentrations of cobalt and other metal oxides creates a spectrum of colors for use in inks and pigments, and to color ceramics and glass.
Electrolytically refined cobalt chips as well as a high-purity cobalt cube for comparison.
About 30 years ago, nobody thought much about cobalt.
Today, this metal, with myriads of uses, is one of those elements that gets dragged into the spotlight due to the role it plays in electric vehicle batteries, with critics citing the disparity between the environmental and social costs of producing cobalt and the green tech solutions this critical metal enables.
But we can't build a clean energy future without materials. How and where we get metals like cobalt in the greenest ways possible is the test of another renewable energy – human ingenuity.
Reinventing the way we power our world since the Industrial Revolution isn't fast or cheap. But it's getting easier.
Cobalt is used in critical industrial and military applications, including superalloys for parts in aircraft engines, gas turbines, high-speed steels, corrosion-resistant alloys, cemented carbides, and diamond tools, while cobalt catalysts play a strategically important role in the hydrogen and chemical industries.
"An estimated 50% of cobalt consumed in the United States was used in superalloys, mainly aircraft gas turbine engines" last year," according to the U.S. Geological Survey.
Cobalt's magnetic properties, when alloyed with aluminum and nickel, make it essential for powerful magnets used in wind turbines, hard disk drives, motors, sensors, and actuators, as well as in medical applications such as magnetic resonance imagery, radiotherapy, prosthetics, and implants.
Due to the growing need for cobalt in the lithium-ion batteries powering EVs and geopolitical issues related to its supply, this increasingly critical energy metal is considered at extreme risk of disruption.
According to S&P Global Commodity Insights research, a cobalt deficit in 2021 had mining companies increasing production in response to demand from the booming EV and battery markets. As demand unexpectedly cooled, the market was left with a surplus, exacerbated by increased production from Indonesia and the Democratic Republic of Congo (DRC), both of which have poor records of human rights and environmental regulation violations.
In 2023, cobalt used in energy storage drove 93% of total demand growth, with electric vehicles alone accounting for 45% of the global market. Cobalt's thermal stability, high melting point, and heat capacity prevent lithium-ion battery cathodes from overheating, while its good conductivity and high energy density enable batteries to store and transfer more energy, making them lighter and more efficient.
According to a report by the Cobalt Institute, "For the very first time in 2021, cobalt demand from electric vehicles overtook other battery applications to become the largest end use sector at 34% of demand. It is expected to account for half of the cobalt demand by 2026."
Potential solutions are twofold – push for less cobalt content in electronics and battery designs and steer clear of supply tainted by human rights issues. However, cobalt isn't going away, and keeping cobalt from artisanal mines in DRC out of the value stream is next to impossible due to the convoluted nature of the current supply chain.
"Global buyers engaging in a futile attempt to avoid cobalt associated with ASM (artisanal and small-scale mining) ignore the inconvenient truth that it is nearly impossible to separate the flow of ASM cobalt from the larger supply of industrially mined cobalt," said Dorothée Baumann-Pauly, director of the Geneva Center for Business and Human Rights.
With the top two cobalt-producing countries being the DRC and Indonesia, the choice is between environmental and social costs or a bigger price tag – safety and sustainability are expensive.
Deep-sea mining remains in its infancy, grappling with high costs and the immense pressures – both literal and figurative – of operating in poorly regulated international waters. While individual nations and member states of the International Seabed Authority are working to develop conventions that support industry and environmental security, the extreme wealth of oceanic battery metals remains tantalizingly out of reach.
The Western world's willingness to pay a premium for responsibly sourced cobalt may be the ultimate test of priorities.
The famous cobalt blue color is created by mixing cobalt oxide with alumina. Altering the concentrations of cobalt and other metal oxides creates a spectrum of colors for use in inks and pigments, and to color ceramics and glass.
Cobalt is currently inexpensive and plentiful, but this isn't good news for the U.S. A collapse in price from over $40 to $17 per pound has hindered the development of domestic cobalt supplies, with the price dropping further to $11.72 as of August.
Oversupply has kept prices low. According to Bloomberg, hedge funds like Anchorage Capital Advisors and Squarepoint Capital are buying up cobalt at bargain-basement prices.
Similarly, during 2015-2016, when EVs were first promising demand, hedge funds physically hoarded enough of the global supply to create an artificial supply shock, which consequently led to a quadrupling of cobalt prices in 2017.
Meanwhile, China continues to build its stockpiles, staying ahead of the curve by buying up mines, constructing production facilities, and investing heavily across the spectrum of battery technologies, all while acquiring cobalt in record volumes. In response, the U.S. is seeking to reinvigorate its own stockpiling program, highlighting the metal's strategic value in defense.
While several countries are attempting to divorce themselves from a Chinese-dominated battery metals market, there is still risk that further geopolitical drama might send North America scrambling for supply in the future.
Cobalt is predominantly a byproduct of nickel and copper mining, making its supply largely dependent on these other commodities. With new projects being slow and expensive to develop, U.S. domestic potential for cobalt remains in its early stages.
Notably, Idaho is home to the largest cobalt belt in the U.S., with sediment-hosted copper-cobalt systems comparable to some of the DRC's largest deposits.
Despite this potential, the instability of demand and prices has created an on-again, off-again status for the only U.S. cobalt mine-the Idaho Cobalt Operation (ICO), built by Australian company Jervois Global in 2022.
Jervois wound up suspending the final construction stage due to costs higher than the price of cobalt could return. But, with the U.S. commitment to domestic production and emphasis on cobalt's importance to defense, the mine may yet reopen.
Several other North American sources of cobalt are in the pipeline. Among them, Electra Battery Materials is advancing the Iron Creek project in Idaho, which is home to one of the few primary cobalt-copper deposits in the U.S.
Additionally, Electra is expanding and upgrading The Ontario Cobalt Refinery about 300 miles north of Toronto – the only hydrometallurgical facility of its kind in North America. This strategic location positions Electra to supply key players like Ford, General Motors, and POSCO with essential battery materials.
Meanwhile, EVelution Energy has forged an alliance with Glencore to secure feedstock for its first commercial-scale cobalt processing facility in the U.S.
This facility, touted as the first green cobalt sulfate production site in the country, will generate its own power, deliver surplus clean electricity to nearby farmers, and recycle approximately 70% of the water it uses, minimizing its environmental impact. Construction is expected to begin this year, with full operation slated for 2026.
Electrolytically refined cobalt chips as well as a high-purity cobalt cube for comparison.
Recognizing the strategic importance of cobalt, the U.S. Department of Defense (DOD) has provided grants to support several North American projects dedicated to processing, refining, and recycling this critical metal.
The largest such investment so far is a $20 million grant awarded to help complete the construction and commissioning of the Ontario Cobalt Refinery.
"This award will develop North American production of a key precursor material for large capacity batteries, helping to create a more robust industrial base capable of meeting growing demand across both the defense and commercial sectors," U.S. Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale said in August.
Electra, however, was not the Pentagon's first investment in Canadian cobalt. Earlier this year, DOD awarded $6.4 million to Fortune Minerals Ltd. to support development of the NICO cobalt-gold-bismuth-copper project, which includes a planned mine in the Northwest Territories and a hydrometallurgical refinery to be built in Alberta.
DOD has also invested in cobalt projects on U.S. soil, including a $15 million grant in 2023 to Jervois Mining USA to expand mining at its Idaho Cobalt Operations and potentially establish a refinery in the U.S.
The Idaho investment was followed by a $7 million grant to The Doe Run Resources Corp. earlier this year to complete a demonstration-scale hydrometallurgical plant in Missouri that will focus on the separation of cobalt and nickel.
"This award is another important step towards decreasing reliance on unstable sources of cobalt and nickel, and ensuring a sustainable industrial base capable of meeting current and future demand," said Taylor-Kale.
Another potential source of future cobalt in Missouri is drawing attention, as the Export-Import Bank of the United States (EXIM) has invited U.S. Strategic Metals to apply for a $400 million loan to fund the development of a battery materials processing facility and an associated cobalt-copper-nickel mine in the Show-Me State.
"The demand for domestic battery production and critical mineral exploration is on the rise, and this investment proves Missouri is well-positioned to capitalize on that opportunity and emerge as a national leader," said Missouri Gov. Mike Parson.
In 2023, the Eagle Mine in Michigan made headlines by expanding its production to include cobalt-bearing nickel concentrate. This strategic move is part of a broader effort to tap into unconventional resources, with the potential to recover an additional 2 million pounds of cobalt from the mine's Humboldt Tailing Disposal Facility.
While Eagle Mine is pioneering new cobalt recovery methods, Missouri Cobalt has been steadily producing nickel-copper-cobalt concentrate from historic mine tailings at its Fredericktown facility since 2019. In addition to this, the company operates a pilot hydrometallurgical facility in Earth City, Missouri, which has been producing high-grade cobalt since 2020.
In a pinch, cobalt is infinitely recyclable, offering a sustainable solution regardless of the challenges surrounding its extraction and supply. With current techniques achieving efficiency rates between 89.7% and 99%, the secondary supply of cobalt from batteries, though small-scale now, is expected to grow as early generations of EV batteries reach the end of their life cycle.
According to the USGS, cobalt content from purchased scrap made up an estimated 25% of last year's consumption, with approximately 68% of recycled cobalt coming from batteries and another 24% sourced from hard metal scrap.
In a bid to further reduce dependency on imports, the U.S. Department of Energy released a national blueprint in June designed to guide investments in domestic lithium battery manufacturing while supporting research and development initiatives.
Central to this blueprint is the ambitious goal of eliminating cobalt from lithium batteries by 2030. To tackle the challenges associated with reducing or removing cobalt from EV batteries, the DOE's Vehicle Technologies Office has initiated a multi-year program dedicated to advancing these critical technologies and securing a more sustainable supply chain.
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