8th September 2017
Growing demand for cobalt is likely to see supply deficits widen into the next decade with prices potentially climbing over US$100,000 per tonne, reports MiningNews, citing new research from London-based Bernstein.
The LME cobalt price is currently $60,750/t after peaking last week at $61,250/t.
But Bernstein says a sustained period of cobalt prices in excess of the last peak in 2008 ($107,000/t) is likely in order to provide incentive for cobalt exploration and development to support increasing electric vehicle demand.
Bernstein forecasts that, in a scenario of the world progressing towards a truly green economy, cobalt demand will surpass 1 million tonnes per annum in 2034, predominantly driven by battery demand for EVs. Mine supply in 2016 was around 120,000t.
This stems from an expected demand compound annual growth rate (CAGR) of about 17% generated by 2030 and assumes there is a move towards more nickel-rich battery chemistry from cobalt as companies look to increase the range of EVs to drive
consumer adoption and avoid dependency on one constrained commodity like cobalt.
EVs are expected to represent 11.2% of global car sales by 2025, 45.7% by 2030, and 84% by 2040, Bernstein said. The resulting cobalt demand from EVs should hit 426,000t in 2030, rising above 700,000t per annum toward the end of the 2030s.
However, looking at the supply side, Bernstein notes that, even in a very optimistic scenario, supply will not get anywhere close to demand levels, delivering a CAGR of just 10% by 2030.
Even to reach this 10%, there will have to be the development and ramp up of all existing projects over the next three years so reserves can be used over the next 20 years. The smooth development and commissioning of all projects over the next 15 years is also needed, combating hurdles such as licensing issues, environmental problems, project economics and a lack of financing.
In addition, effective battery recycling capability must be developed as soon as possible so 80% of the world’s new batteries can be recycled, with a 90% recovery of the contained cobalt, giving a solid stream of secondary supply toward the end of 2020.
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