China is way ahead in the worldwide race to lock up the cobalt supply chain, according to Scott Patterson and Russell Gold in The Wall Street Journal. Reporting from Kolwezi, Democratic Republic of Congo, they write that freelance miners known as creuseurs (French for diggers) sell ore to wholesalers with names like Crazy Jack and Boss Lee—most of whom are Chinese. The wholesalers ship the ore to China for processing into lithium-ion batteries.
Patterson and Gold write, “Chinese imports of cobalt from Congo, the world’s biggest producer of cobalt, totaled $1.2 billion in the first nine months of 2017, compared with just $3.2 million by India, the second-largest importer, government data show.” They quote Trent Mell, chief executive of Toronto-based First Cobalt Corp. as saying, “We’re realizing that the Congo is to [electric vehicles] what Saudi Arabia is to the internal combustion engine.”
U.S. and European companies are wary of ore coming from creuseurs, Patterson and Gold write, because some of the miners are children, safety equipment is rarely used, and injuries are common. Nevertheless, Darton Commodities estimates that the freelancers produce 14% of the country’s output.
Patterson and Gold further cite Morgan Stanley estimates that electric vehicles used about 1,300 metric tons of cobalt in 2014, rising to 11,320 this year and 62,940 by 2025. They quote Jack Bedder, an analyst at the London-based market-intelligence firm Roskill, as saying, “If our projections for electric vehicles are anywhere near close, there are going to be some serious issues in the cobalt market” after 2020.
Patterson and Gold note that global battery manufacturing capacity is now about 110 GWh per year, with China having announced plans to add another 150 GWh over the nest three to four years. U.S. consumers could benefit, they say, if the Chinese drive down battery prices. The downside, they add, is that too much price cutting could stifle the development of better batteries.
They quote Varun Sivaram, a technology fellow at the Council on Foreign Relations, as saying, “China controls the majority of global production of solar panels, wind turbines, and batteries. Really superior technologies have no chance of breaking in, and that worries me.”
