Why Electric Vehicles?

Compared to Internal Combustion Engine (ICE) vehicles, EVs offer substantial cost savings and environmental advantages, that include:

  • Significant greenhouse gas emission reduction.
  • Air quality improvements.
  • Lower operating costs.
  • Lower maintenance costs.
  • Higher efficiency.
  • Reduction of traffic noise.
  • Less driving vibration.
Battery location in Electric Vehicle

While EV sales to 2025 will remain relatively low, experts such as BNEF (Bloomberg New Energy Finance) expect an inflection point in adoption between 2025 and 2030, as EVs become economical on a total cost of ownership basis. Global EV sales progression is shown in the chart below.

Graph of Increasing EV sales

Cobalt to EV production chain

Cobalt metal contracts were first quoted on the London Metal Exchange (LME) in 2010. LME liquidity, however, remains poor and as such these contracts do not represent true market pricing.

Instead, cobalt products are traded directly between companies, typically from miner to (intermediate) refinery then to a (higher specification) refinery before being sold as a precursor ingredient, ready to be formed into a battery cathode. Approximately 90% of global cobalt refining capacity is currently based in Asia, where little attempt has been historically made to verify the origin of cobalt units. In an era of ethically sourced cobalt, this model needs changing.

The key steps of battery production are shown below, with cobalt sulphate (CoSO4 – a precursor ingredient) being priced (approximately) in line with cobalt metal.

The cobalt production chain