The cobalt market (2020) is highly concentrated with the top five countries supplying 80% of the global market, estimated to be 140,000t of metal production per year. The Democratic Republic of the Congo (DRC) alone supplies 66% of the global market, highlighting the dependence the cobalt market has on one country to supply, and keep on supplying, this strategic metal. The figure below shows cobalt production by major country (2020).
Cobalt is a byproduct
98% of all cobalt produced globally is produced as a by-product from either copper or nickel mining. This means that cobalt supply swings in/out of production as dictated by the primary metal (copper or nickel) pricing and not on cobalt market fundamentals. A primary cobalt mine such as the Broken Hill Cobalt Project is a unique project targeting this valuable metal.
Broken Hill Cobalt Project
The Broken Hill Cobalt Project (BHCP) is a combined mine/refinery located in New South Wales, Australia. In terms of annual cobalt production, it is one of the largest greenfields cobalt projects in the world. For the sake of comparison we had added the BHCP* (*not in production as of 2020) to this supply, highlighting the scale of the project.
The BHCP production chain
The BHCP aims to mine and refine cobalt into a battery ready (cobalt sulphate) product. Cobalt sulphate is a high value product in demand for the production of lithium ion batteries. This chemical will be shipped directly to global battery makers, ensuring an unbroken chain of custody for ethical Australian sourced cobalt. Shareholders will also benefit from the increased financial margins received by selling this high value product.
Over 57,000 tonnes of cobalt are forecast to be produced over the life of the BHCP. That is enough cobalt to power 5,000,000 EVs around the globe.
One study (Working Paper Sustainability and Innovation – No. S 02/2019 Germany) found that emissions from EVs have carbon dioxide emissions up to 43% lower than diesel vehicles. Accordingly, these 5,000,000 million vehicles will reduce global carbon dioxide emissions by 10 million tonnes per year*. These emission reductions will increase as renewables energy generation increase over time.
(* EPA Australia – average passenger vehicle emits 4.6 tonnes of carbon dioxide per year)