VIDEO: Benchmark Mineral Intelligence: Cobalt is the Most Critical Element for Batteries Copy


Simon Moores is Benchmark Mineral Intelligence’s Managing Director. He joins us today to discuss cobalt in the context of the lithium-ion battery supply chain.


Simon Moores:  I think cobalt is the most critical of the three battery raw materials. I don’t think it’s necessarily the most important; I think that’s actually lithium. But cobalt really, because 66 percent comes from the DRC, then you’ve literally got a very lopsided industry from the supply perspective. So that also creates a number of problems downstream with buyers like Apple, or let’s say ultimate end users like Apple or Google, in their new devices, or Tesla in their cars. It presents a corporate social responsibility problem, a CSR problem, and that is: these companies don’t want to be linked with any cobalt that is illegally mined in the Congo.

Now, under 15 percent of cobalt is actually from these illegal sources; a lot of it is responsibly mined by larger mining companies, but to have that in your supply chain isn’t healthy for any industry. So the new big buyers of cobalt, or ultimate end users of cobalt, will be looking to other sources. So that’s really why cobalt is – that’s the real driver, I think, behind the cobalt sector, rather than a mismatch of supply and demand.

James West:    I see. So it’s 60 percent of it concentrated in the DRC as source; why hasn’t there been development outside of the DRC, in terms of new cobalt deposits?

Simon Moores:  Price has been low. So the cobalt metal price has been depressed for some time, since really 2008, where you had a price volatility, a huge price spike. And the cobalt market. So with the price low, there isn’t much incentive for new cobalt projects to exist outside of the market.

Another big factor of cobalt, another big problem is, the fact it’s produced as a by-product of copper, and a by-product of nickel. Now these are big commodities that are used in industrial markets. Cobalt’s also used in steel, but really, 45 percent of it is still used in batteries, and that’s the growth market. So the other issue cobalt has to overcome is dealing with a stagnant industrial market whilst also dealing with a high tech, high growth market in batteries, and that’s the big cobalt conundrum they’re dealing with.


James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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