Africa will continue to play a dominant role in the supply of cobalt for use in electric vehicle batteries, says Core Consulting MD Lara Smith.
Speaking at a South African Institute of Mining and Metallurgy (SAIMM) breakfast seminar, in Johannesburg, on Thursday, she indicated that, from an economic perspective, Africa has the cobalt resources, such as in the Democratic Republic of Congo, to meet growing demand from the EV sector.
Smith believes the recent changes in cobalt market conditions are all short term in nature, owing to elements such as credit risk, artisanal risk and the rebalancing of portfolios.
She noted that cobalt supply was a long-term game, with China, the biggest manufacturer of EV batteries, continuing to augment its cobalt sulphate manufacturing capacity. “While long-term demand is strong, capital is impatient.”
Cobalt sulphate is used in the manufacture of EV batteries. The cobalt sulphate needs to meet certain standards. Africa is ideally positioned to supply cobalt sulphate that meets the required standards of EV manufacturers, said Smith.
She explained that, in order to be used in EV batteries, cobalt sulphate has to be produced under carefully controlled conditions and that the cobalt content in the cobalt sulphate has to be between 20.55% and 21%, but with impurities below 10 parts per million.
Also, the cobalt sulphate needs to have zero moisture content, as this leads to decay.
Further, the material needs to be free flowing, as it is hygroscopic and, therefore, manufacturers cannot keep large amounts of inventory in stockpiles.
Moreover, cobalt sulphate is expensive to transport and needs to be produced close to the EV battery manufacturer.
African mining entities are positioned well to supply cobalt in its hydroxide form to cobalt sulphate manufacturers, especially those in China.