Spike in electric vehicle sales drives cobalt price hike
Demand and prices for battery material cobalt are soaring as electric vehicles stream out of showrooms in China and Europe, with little prospect of a significant reversal as drivers and governments move to cut carbon emissions, reports Reuters.
Payables - a reference to the percentage of the cobalt metal price used to price hydroxide, a feedstock for electric vehicle (EV) batteries - are up at around 93-94% from about 63-69% a year ago, analysts from Benchmark Mineral Intelligence said.
“Primarily the price rise has been driven by real demand, largely due to the rapid increase in sales of EVs,” said Benchmark’s head of price assessment Caspar Rawles.
“Ultimately, the overall price trend is up, although we may see some volatility.”
Supplies are scarce, partly due to COVID-19 logistical issues in South Africa - which transits material from the cobalt-rich Democratic Republic of Congo (DRC) - and after top cobalt consumer China stockpiled metal.
Cobalt demand - mainly for EVs where it is used to stabilise and extend the life of lithium-ion rechargeable batteries - is expected to outstrip supply, creating deficits.
Benchmark expects demand for cobalt to jump 18% this year from last year, or about 23,000 tonnes.
Shortages have been exacerbated by the closure since 2019 of the Mutanda mine in DRC, owned by top producer Glencore, and a decline in artisanal mining.
“There is a very material concern around long-term shortages for cobalt,” said George Heppel, analyst at CRU Group.
Sustained higher prices could see artisanal mining in the DRC rise while also incentivising smaller mines in other parts of the world, Heppel said.
The 127,000-tonne cobalt market will likely flip into a deficit of about 1,000 tonnes this year from a surplus of 1,100 tonnes last year, Benchmark data show.
Global EV sales are expected to rocket 50% in 2021 to 4.7 million vehicles and soar to 14.3 million by 2025, consultancy Rho Motion project estimated.
Rio Tinto and Alcoa begin construction with ELYSIS tech
Eliminating all direct greenhouse gases from aluminium smelting has taken a major step forward with the start of construction on the first commercial-scale prototype cells of ELYSIS’ inert anode technology, at Rio Tinto’s Alma smelter in Saguenay-Lac-Saint-Jean, Quebec.
ELYSIS has the potential to reduce the carbon footprint of aluminium production
ELYSIS is a joint venture company led by Rio Tinto and Alcoa that is developing a new breakthrough technology, known as inert anode, that eliminates all direct greenhouse gases (GHGs) from the traditional smelting process and instead produces oxygen.
The technology has the potential to transform the aluminium industry, with a significant reduction in its carbon footprint.
The inert anode prototype cells will operate on a commercial scale typical for large modern aluminium smelters, using an electrical current of 450 kiloamperes (kA).
The Honourable Francois-Philippe Champagne, Minister of Innovation, Science and Industry joined representatives from ELYSIS, Rio Tinto and Alcoa to mark the start of construction and announce a further CAD $20mn financial contribution from the Government of Canada to support the project.
The federal government's financial support will enable the creation of a unique commercial size inert anode technology showroom for future customers and will help develop the supply chain by involving local and regional equipment manufacturers and suppliers in the project.
ELYSIS is working to complete the technology demonstration by 2024 followed by the commercialization activities.
ELYSIS technology at a glance:
- The ELYSIS technology addresses the global trend towards producing low carbon footprint products, from mobile phones to cars, planes and building materials.
- The new process will reduce operating costs ofaluminiumsmelters while increasing production capacity. It could be used in both new and existing aluminium smelters.
- In Canada alone, the ELYSIS technology has the potential to reduce GHG emissions by 7 million tons, the equivalent of removing 1.8 million cars from the roads.
- ELYSIS will also sell next-generation anode and cathode materials, which will last more than 30 times longer than traditional components.
Alcoa and Rio Tinto will continue to support the ELYSIS development program alongside the Governments of Canada and Quebec.
ELYSIS is working closely with Alcoa's Technical Center, where the zero-carbon smelting technology was invented, and the Rio Tinto technology design team in France.
Alcoa's Technical Center supports ELYSIS in the manufacture of proprietary materials for the new anodes and cathodes that are essential to the ELYSIS process. The Rio Tinto technology team in France is creating commercial scale designs for the ELYSIS technology.
Vincent Christ, CEO, ELYSIS commented: “This is a great day for ELYSIS. It means that we are becoming the first technology company in the world to build commercial-size inert anode cells. While we refine the technology in our R&D Centre, we start the construction of our prototype cells. This shows our confidence in our process and in the know-how of our team. The combination of ELYSIS' zero CO2 technology and Quebec's renewable energy will be great competitive advantage for the future. I would like to thank the government for its support and all the partners for their commitment.”
Samir Cairae, Rio Tinto Aluminium managing director Atlantic Operations and ELYSIS board member added: “Today marks a real step towards the future of the aluminium industry, by progressing this breakthrough technology to cut carbon emissions. Rio Tinto is committed to supporting its ongoing development here in Quebec where we already use clean hydropower to deliver some of the world’s lowest carbon aluminium. Combining this technology with renewable hydropower holds the promise of zero carbon aluminium smelting.”