Critical raw material
- Lustrous, silvery-blue, magnetic metal
- Atomic weight is 58.933195
- Density of 8.85 grams per cubic cm
- High melting point of 1,493C (2,719F)
- Retains its strength at high temperatures
- Maintains its magnetism at temperatures up to 1,121C (2,050F)
- Boiling point of 2,927C (5,301F)
The majority, 49% of all cobalt, is used for batteries and represents the main driver for the commodity’s demand.
Lithium-ion batteries are the most commonly used type of rechargeable battery and contain a cobalt cathode.
They are used for the following applications:
- Portable devices – mobile phones, laptops, tablets, power tools
- E-mobility – electric vehicles including hybrids, electric trains, electric bikes and disability devices
- Stationary – renewable energy storage both commercial and domestic, ancillary services to the electrical grid
Cobalt is also important in other battery technologies such as nickel-cadmium batteries (NiCd) and nickel-metal hydride (NiMH) batteries.
Cobalt-based batteries have high energy density, chemistry that is attractive for portable electronic equipment
Cobalt is a physically traded commodity where published market prices are derived from telephone surveys with traders and consumers. Prices of cobalt are provided in two grades including 99.3% and 99.8% purity. Metal Bulletin publications have traditionally been the source for the market price of cobalt. In 2010, the London Metal Exchange introduced the cobalt contract where prices of exchange traded contracts are published.
Cobalt is produced primarily as a by-product of nickel and copper mining, with 60% of cobalt coming from copper mining, 38% from nickel production, and only 2% from primary cobalt mines.
Cobalt is one of the materials on the EU ‘Critical’ metals and minerals list. These materials are of high economic importance and also often have a high risk associated with their supply.
Approximately 62% of global production originates from the Democratic Republic of Congo.
Source: CRU, Global Production (2016)
a key component of Li-ion batteries, the battery chemistry adopted in most rechargeable batteries.
- Silvery-white, light, soft metal
- Atomic weight is 6.94
- Density of 0.53 grams per cubic cm
- Highest electrochemical potential, which enables it to achieve very high energy and power densities.
- Highest specific heat capacity among solids making it highly applicable to long useful life in small and lightweight batteries
hard rock mines – Typical grades are in the 0.9-1.6% Li2O range. The hard rock deposits are processed to a concentrate which is widely used in industry or may be converted to lithium carbonate or lithium hydroxide.
lithium brines – Typically derived from evaporative lakes and salars. The salars of Chile and Argentina have the highest lithium concentration in the 680-1570ppm range. The chemistry of saline brines is unique to each site and can change dramatically even within the same salar.
lithium clays – Mainly hectoritencontaining 0.24-0.53% Li2O. No production has yet been made from lithium clays although a number of projects are studying their potential
It has generally been accepted in the industry that production from brines is less costly than from hard rock mines mainly due to the elimination of mining costs. However recent studies have shown that brines generally have lower operating costs but higher capital expenditure than hard rock mines and typically take longer to bring into production, which make brine and hard rock projects broadly similar in comparative NPV terms. Hard rock deposits, as encountered at the Project, have some advantages in generally having less impurity variation than brine deposits.
Roskill estimated in their report Lithium Market outlook to 2017-12th Edition, 2013, that total global demand was 150,200t LCE in 2012 up from 68,000t LCE in 2000 showing an average annual growth rate of 6.8%.
The glass and ceramics industries have historically been the biggest consumers of lithium. Since 2000, rechargeable batteries have been increasingly important, growing from 4% to 27% of total consumption. This has been driven by the adoption of lithium-ion technologies in consumer electronics and the emergence of products including tablets and smart phones.
Present & Future
In their report Roskill forecasted the medium-term outlook for lithium consumption as strong with a base case overall growth rate at just under 10% per annum.
Furthermore, a high case scenario of surging demand for lithium secondary batteries in electric vehicles and stronger global economic growth could results in an average growth rate of almost 16% per annum.
Most of the large car manufacturers are launching models that integrate lithium-ion battery technology whilst Tesla is aiming to bring electric vehicles to the mass market by lowering costs and entering into battery manufacture with their ‘Gigfactory’ in Nevada which will initially produce 500,000 units per annum.
It will invariably take time for leading car manufacturers and society to adopt electric vehicles to a point which will impact the lithium market. However, there is growing concern by governments to take action to reduce global warming and pollution of cities by use of fossil fuels and the adoption of electric vehicles can play a significant role. The market for lithium ion batteries has grown markedly following the adoption by consumer technologies – and car batteries require substantially more lithium to power electric vehicles.
Increased use of lithium-ion batteries for heavy duty power storage particularly linked to sources of renewable energy off-grid was also projected by Roskill. The increasing use of lithium-aluminium alloys in aircraft manufacture to lighten weight and improve fuel efficiency has good growth potential.
A high case scenario of surging demand for lithium secondary batteries in electric vehicles and stronger global economic growth results in an average growth rate of almost 16% per annum
Roskill estimated in their report that in 2012 the total production of lithium was approximately 168,000t (LCE). There are four major lithium producers globally with three being brine producers and one hard rock producer. These “big four” according to Roskill accounted for approximately 82% of world lithium production in 2012.
Since 2012, There has been a noticeable increase in corporate activity in the lithium sector with a number of companies looking to consolidate their supply sources given the favourable forecasts for lithium in the foreseeable future. Also, strategic end users are seeking to secure supply by taking equity positions and arranging offtake agreements with potential producers of lithium.
The pricing of lithium is negotiated off-market and based on customer specifications with price information rarely reported. Higher purity lithium products that include certain battery products carry a premium over technical grade lithium.
According to Roskill, prices for technical grade lithium carbonate increased from US$2,187/tonne in 2004 to US$5,288/tonne in 2012. Roskill expected prices to continue to rise in the foreseeable future as new markets and applications are found for lithium products. Their base case forecasts US$6,900 in 2017. The high case scenario, with more rapid take up of electric vehicles, sees a lithium carbonate price of US$7,800 for technical grade in 2017 with battery grade commanding a US$500/tonne premium.