CAPE TOWN (miningweekly.com) – Demand for cobalt, tantalum and rare earth metals – seen as critical minor metals necessary for the continuation of the modern way of life – would continue to increase, but a mining consultancy group said on Monday that there was a risk of supply disruptions.
Speaking at the Investing in Africa Mining Indaba in Cape Town, Core Consultants MD Lara Smith cited the political situation in the Democratic Republic of Congo (DRC), where 50% of the world’s cobalt reserves were found, as a potential risk to supply.
“Moreover, transport logistics in Africa as a whole are in need of a continental overhaul and are extremely problematic and could bring supply disruption,” she said.
Smith also said that China, which refines most of the world’s cobalt, could restrict exports, as the country had already done with other commodities, leading to greater price volatility and increased risk of supply disruptions.
However, she remained bullish about the sector, and said demand for cobalt continued to increase.
Approximately 3.6 g of cobalt is used in almost every single mobile phone battery and the penetration of mobile phones, especially in Africa and Asia is expected to continue to increase driving cobalt demand. With laptop and tablet production expected to double over the next five years, Smith said this would require an estimated 11 000 tons of cobalt.
“Cobalt has numerous uses, including super alloys and catalysts, but its growth in battery application has outpaced all other end-uses and now accounts for over 27% of overall consumption compared to 11% in 2002,” said Smith.
Electric vehicles and electric bicycles are also expected to strongly drive cobalt demand, as approximately 4 kg of cobalt would be required for a hybrid electric vehicle battery and 6 kg for a fully electric vehicle. With between 12- and 13-million hybrid electric vehicles expected to be on the road by 2020, this would necessitate between 20 000 t and 30 000 t of cobalt, said Smith. Increased manufacture of electric bicycles and continued demand for aircraft would add further upward pressure on the metal.
Smith said that tantalum was similar in that Core Consultants expected demand of the metal to increase, as the miniaturisation of electronic devices has resulted in higher use of tantalum. The primary requirement for tantalum was now in capacitors for application in automotive electronics, mobile phones, computers and wireless devices.
“The 2008/9 recession caused a reduction in the demand for electronics which had a knock-on effect on tantalum, however if we assume a conservative steady growth rate of 4% in coming years the demand will be perfectly balanced. Growth above 4% will result in a supply shortage as early as 2014. Consequently we believe that prices should ultimately move to reflect this deficit,” said Smith.
With China having reduced their export quota of rare earth metals by 40% in 2010 there is continued concern for the supply of these metals. Smith noted particularly that deficits of selected rare earth metals could affect a number of industries including those producing solar panels, fluorescent bulbs, wind turbines and electric car batteries.
“Considering all the rare earth (metals) then we project a surplus market by 2014, however if we consider only . . . critical rare earths then even on those optimistic projections it leads us to the conclusion that the market will be in deficit by some 20 000 t as early as 2015.”