Cobalt Shortage Affecting Electric Car Industry
By James Donahue
July 11, 2017
The formula behind the booming electric car industry has been the development of batteries that can hold a major electric charge so a vehicle can move for hours at various speeds and thus compete with gasoline powered vehicles. And the secret behind those amazing new types of batteries being used not only in electric cars but in computers, mobile communication devices and a variety of other powered household and industrial appliances is cobalt.
Bad news: there now is a major shortage of cobalt. Everybody wants the stuff and nobody thought to expand mining operations to produce enough to keep up with the growing demand.
As even the most ingenuous of readers may have guessed by now that cobalt is a major component in the development of the rechargeable lithium-ion batteries used in nearly all of the battery-operated devices on the world market, and especially electric cars.
The use of cobalt in rechargeable batteries grew between 1995 and 2000. Some suggest that the demand for cobalt went from about 700 tons to almost 5,000 tons during those years. The world-wide recession that struck in about 2001 brought about a drop in demand for the sale of portable telephones and computers. This in turn caused a 20 percent drop in the demand for cobalt.
Now as global warming has moved into the spotlight the world-wide rush for the development of green energy has brought about a big demand for the electric cars. This is especially true in China where that nation is fighting deadly carbon dioxide levels. The demand for electric cars there, in India and major cities all over the world is creating a big and unexpected demand for more cobalt. The value of that metal has jumped about 50 percent, to about $19 a pound and it is expected to go higher. Consequently investors are buying up all the cobalt on the market, expecting to cash in as the demand climbs.
And wouldn’t you know it, about 50 percent of cobalt is primarily found in the war-torn Democratic Republic of Congo in central Africa. The cobalt there is mined by children, reportedly as young as seven years old. They are earning as little as a dollar a day for life-threatening work that some researchers are comparing with Sierra Leone’s blood diamond industry. Only with cobalt they are calling it “conflict metals.” It is a vicious cycle in the Congo. The money from the cobalt sold by the Republic of Congo is being used to finance the ongoing war.
Because they see the writing on the wall, and because customers do not wish to exploit the children of the Congo for their batteries, a business group called Electronic Industry Citizenship Coalition (EICC) has formed a Responsible Raw Materials Initiative for the purpose of financing a search for new sources of cobalt and other “conflict minerals.” Involved in this quest are Fortune 500 companies that include Apple, Dell and Ford Motors.
Even after new sources of cobalt are found, we can expect the price of those amazing rechargeable batteries to go much higher.
There may be some good news in all of this. The amazing gathering of creative minds in Silicone Valley, California, are always looking for better ways of doing things. Because of the dramatic hike in the price of cobalt, they are already looking for alternative ways to build rechargeable batteries and operate the growing array of electronic toys without having to plug anything into a wall socket.
By James Donahue
July 11, 2017
The formula behind the booming electric car industry has been the development of batteries that can hold a major electric charge so a vehicle can move for hours at various speeds and thus compete with gasoline powered vehicles. And the secret behind those amazing new types of batteries being used not only in electric cars but in computers, mobile communication devices and a variety of other powered household and industrial appliances is cobalt.
Bad news: there now is a major shortage of cobalt. Everybody wants the stuff and nobody thought to expand mining operations to produce enough to keep up with the growing demand.
As even the most ingenuous of readers may have guessed by now that cobalt is a major component in the development of the rechargeable lithium-ion batteries used in nearly all of the battery-operated devices on the world market, and especially electric cars.
The use of cobalt in rechargeable batteries grew between 1995 and 2000. Some suggest that the demand for cobalt went from about 700 tons to almost 5,000 tons during those years. The world-wide recession that struck in about 2001 brought about a drop in demand for the sale of portable telephones and computers. This in turn caused a 20 percent drop in the demand for cobalt.
Now as global warming has moved into the spotlight the world-wide rush for the development of green energy has brought about a big demand for the electric cars. This is especially true in China where that nation is fighting deadly carbon dioxide levels. The demand for electric cars there, in India and major cities all over the world is creating a big and unexpected demand for more cobalt. The value of that metal has jumped about 50 percent, to about $19 a pound and it is expected to go higher. Consequently investors are buying up all the cobalt on the market, expecting to cash in as the demand climbs.
And wouldn’t you know it, about 50 percent of cobalt is primarily found in the war-torn Democratic Republic of Congo in central Africa. The cobalt there is mined by children, reportedly as young as seven years old. They are earning as little as a dollar a day for life-threatening work that some researchers are comparing with Sierra Leone’s blood diamond industry. Only with cobalt they are calling it “conflict metals.” It is a vicious cycle in the Congo. The money from the cobalt sold by the Republic of Congo is being used to finance the ongoing war.
Because they see the writing on the wall, and because customers do not wish to exploit the children of the Congo for their batteries, a business group called Electronic Industry Citizenship Coalition (EICC) has formed a Responsible Raw Materials Initiative for the purpose of financing a search for new sources of cobalt and other “conflict minerals.” Involved in this quest are Fortune 500 companies that include Apple, Dell and Ford Motors.
Even after new sources of cobalt are found, we can expect the price of those amazing rechargeable batteries to go much higher.
There may be some good news in all of this. The amazing gathering of creative minds in Silicone Valley, California, are always looking for better ways of doing things. Because of the dramatic hike in the price of cobalt, they are already looking for alternative ways to build rechargeable batteries and operate the growing array of electronic toys without having to plug anything into a wall socket.