Cobalt is a problem material and it's one that lithium-ion batteries can use a lot of. As EV factory production ramps up for nearly all automakers, EVs have become the main driver of demand for cobalt, surpassing smartphones, which also rely on the metal.
Mobile devices have driven demand for cobalt until now because lots of little batteries still need a cathode and anode in each one. A phone battery doesn't need anywhere near as many materials as an electric or hybrid car battery, but on the other hand, there is a hell of a lot more phones getting made so the difference was about volume. There are about 15 billion mobile devices in the world, compared to 7.2 million electric cars.
With rising demand, there's rising competition for cobalt. The Financial Times reports that 176,370 tons of cobalt were produced in 2021. However, global demand last year required 192,904 tons, already outstripping what can be mined. The automotive industry demanded 65,036 tons of cobalt last year, which was more than a third of the total demand; comparatively, smartphones only accounted for 28,660 tons of cobalt.
And cobalt mining is bad. An awful lot of cobalt comes from the Democratic Republic of Congo, where a decades-long civil war has been funded by international mining companies willing to work with mines that exploit and endanger people, including using forced labor and child labor. The DRC is rich in minerals and low on infrastructure or economic clout and, boy, do companies want those sweet, sweet resources for the cheapest price they can get them.
Car companies desperate to dissociate themselves from the horrible image of poisoning pregnant women with heavy metals and causing stillbirths have created convoluted ways to say their cobalt is always ethically supplied. Such as BMW's 2020 announcement that it would use blockchain assurance to show the cobalt that left its suppliers' mines was the cobalt that turned up at its factories, without the risk of adulteration. Unfortunately, this rests on the suppliers promising really hard that they won't do all the awful things that cobalt miners (and the mining industry at large) have a tendency to do, so there's no magic bullet here.
Tesla said in 2020 it was trying to insulate itself from potential cobalt shortages by moving to nickel-only cathodes. That's a nice idea, but the world's third-largest nickel supplier was Russia and the price has gone up 5.6 times this year alone. Nickel isn't exactly a clean metal to use either, with mines like the one in Norilsk contributing to horrific environmental damage.
The FT's report quoted Tesla CEO Elon Musk saying that he'd consider buying a cobalt mining company, now, to secure supply of the battery material for Tesla."It’s not that we wish to buy mining companies," Musk told the Financial Times Future of the Car summit. "But if that’s the only way to accelerate the transition, then we will do that."
The problem is that an awful lot of good-grade cobalt is sitting in obsolete electronic devices. From Airpods to laptops, the human race has treated lithium-ion battery packs as an infinite resource when they're really not or, at the very least, disposable. Currently, recovering metals from smart devices is incredibly underdeveloped and involves crude acid leaching. That scene in "Bladerunner 2049" with children disassembling devices is a depressingly spot-on vision of the near future. We may be forced to turn to trash to retrieve what we've carelessly thrown in there and we could build packs that are easier to recycle, but that alone may not solve our problem.
Shortages of cobalt have happened before. In 2018, there was a huge runaway in the price, soaring to more $90,000 per 1.1 tons. That surge was largely due to overselling the demand, and hoarders were forced to sell their supply at around $25,000 per 1.1 tons the following year. Cobalt today, according to markets, is north of $75,000 per 1.1 tons.
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