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Cobalt: A Precarious Supply Chain

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Cobalt: A Precarious Supply Chain

Cobalt: A Precarious Supply Chain

How does your mobile phone last for 12 hours on just one charge?

It’s the power of cobalt, along with several other energy metals, that keeps your lithium-ion battery running.

The only problem? Getting the metal from the source to your electronics is not an easy feat, and this makes for an extremely precarious supply chain for manufacturers.

Our infographic today comes to us from LiCo Energy Metals, and it focuses on where this important ingredient of green technology originates from, and the supply risks associated with its main sources.

What is Cobalt?

Cobalt is a transition metal found between iron and nickel on the periodic table. It has a high melting point (1493°C) and retains its strength to a high temperature.

Similar to iron or nickel, cobalt is ferromagnetic. It can retain its magnetic properties to 1100°C, a higher temperature than any other material. Ferromagnetism is the strongest type of magneticism: it’s the only one that typically creates forces strong enough to be felt, and is responsible for the magnets encountered in everyday life.

These unique properties make the metal perfect for two specialized high-tech purposes: superalloys and battery cathodes.

Superalloys

High-performance alloys drive 18% of cobalt demand. The metal’s ability to withstand intense temperatures and conditions makes it perfect for use in:

  • Turbine blades
  • Jet engines
  • Gas turbines
  • Prosthetics
  • Permanent magnets

Lithium-ion Batteries:

Batteries drives 49% of demand – and most of this comes from cobalt’s usage in lithium-ion battery cathodes:

Type of lithium-ion cathodeCobalt in cathodeSpec. energy (Wh/kg)
LFP0%120
LMO0%140
NMC15%200
LCO55%200
NCA10%245

The three most powerful cathode formulations for li-ion batteries all need cobalt. As a result, the metal is indispensable in many of today’s battery-powered devices.

  • Mobile phones (LCO)
  • Tesla Model S (NCA)
  • Tesla Powerwall (NMC)
  • Chevy Volt (NMC/LMO)

The Tesla Powerwall 2 uses approximately 7kg, and a Tesla Model S (90 kWh) uses approximately 22.5kg of the energy metal.

The Cobalt Supply Chain

Cobalt production has gone almost straight up to meet demand, and production has more than doubled since the early 2000s.

But while the metal is desired, getting it is the hard part:

1. No native cobalt has ever been found in nature.

There are four widely-distributed ores that exist, but almost no cobalt is mined from them as a primary source.

2. Most cobalt production is mined as a by-product.

Mine source% cobalt production
Nickel (by-product)60%
Copper (by-product)38%
Cobalt (primary)2%

This means it is hard to expand production when more is needed.

3. Most production occurs in the DRC, a country with elevated supply risks:

CountryTonnes%
United States5240.4%
China1,4171.2%
DRC67,97555.4%
Rest of World52,78543.0%
Total122,701100.0%

(Source: CRU, estimated production for 2017, tonnes)

The Future of Cobalt Supply

Companies like Tesla and Panasonic need reliable sources of the metal, and right now there aren’t many failsafes.

The U.S. hasn’t mined cobalt in significant volumes since 1971, and the USGS reports that the United States only has 301 tonnes of the metal stored in stockpiles.

The reality is that the DRC produces about half of all cobalt, and it also holds approximately 47% of all global reserves.

Why is this a concern for end-users?

1. The DRC is one of the poorest, corrupt, and most coercive countries in the planet.

It ranks:

  • 151st out of 159 countries in the Human Freedom Index
  • 176th out of 188 countries on the Human Development Index
  • 178th out of 184 countries in terms of GDP per capita ($455)
  • 148th out of 169 countries in the Corruption Perceptions Index

2. The DRC has had more deaths from war since WWII than any other country on the planet.

Recent wars in the DRC:

  • First Congo War (1996-1997) – A foreign invasion by Rwanda that overthrew the Mobutu regime.
  • Second Congo War (1998-2003) – The bloodiest conflict in world history since WW2 with 5.4 million deaths.

3. Human Rights in Mining

The DRC government estimates that 20% of all cobalt production in the country comes from artisanal miners – independent workers who dig holes and mine ore without sophisticated mines or machinery.

There are at least 100,000 artisanal cobalt miners in the DRC, and UNICEF estimates that up to 40,000 children could be in the trade. Children can be as young as seven years old, and they can work up to 12 hrs with physically demanding work, earning $2 per day.

Meanwhile, Amnesty International alleges that Apple, Samsung, and Sony fail to do basic checks in making sure the metal in their supply chains did not come from child labor.

Most major companies have vowed that any such practices will not be tolerated in their supply chains.

Other Sources

Where will tomorrow’s supply come from, and will the role of the DRC eventually diminish? Will Tesla achieve its goal of a North American supply chain for its key metal inputs?

Mining exploration companies are already looking to regions like Ontario, Idaho, British Columbia, and the Northwest Territories to find tomorrow’s deposits:

Ontario: Ontario is one of the only places in the world where cobalt-primary mines that have existed. This camp is nearby the aptly named town of Cobalt, Ontario, which is located halfway between Sudbury – the world’s “Nickel Capital”, and Val-d’Or, one of the most famous gold camps in the world.

Idaho: Idaho is known as the “Gem State” while also being known for its silver camps in Couer D’Alene – but it has also been a cobalt producer in the past.

BC: The mountains of British Columbia are known for their rich gold, silver, copper, zinc, and met coal deposits. But cobalt often occurs with copper, and some mines in BC have produced cobalt in the past.

Northwest Territories: Cobalt can also be found up north, as the NWT becomes a more interesting mineral destination for companies. 160km from Yellowknife is a gold-cobalt-bismuth-copper deposit being developed.

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Energy

A Global Breakdown of Greenhouse Gas Emissions by Sector

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A Global Breakdown of Greenhouse Gas Emissions by Sector

In a few decades, greenhouse gases (GHGs)—chiefly in the form of CO₂ emissions—have risen at unprecedented rates as a result of global growth and resource consumption.

To uncover the major sectors where these emissions originate, this graphic from Our World in Data pulls the latest data from 2016 courtesy of Climate Watch and the World Resources Institute, when total emissions reached 49.4 billion tonnes of CO₂ equivalents (CO₂e).

Sources of GHG Emissions

Global GHG emissions can be roughly traced back to four broad categories: energy, agriculture, industry, and waste. Overwhelmingly, almost three-quarters of GHG emissions come from our energy consumption.

SectorGlobal GHG Emissions Share
Energy Use73.2%
Agriculture, Forestry & Land Use18.4%
Industrial processes5.2%
Waste3.2%

Within each category, there are even more granular breakdowns to consider. We’ll take a closer look at the top two, which collectively account for over 91% of global GHG emissions.

Energy Use

Within this broad category, we can further break things down into sub-categories like transport, buildings, and industry-related energy consumption, to name a few.

Sub-sectorGHG Emissions ShareFurther breakdown
Transport16.2%• Road 11.9%
• Aviation 1.9%
• Rail 0.4%
• Pipeline 0.3%
• Ship 1.7%
Buildings17.5%• Residential 10.9%
• Commercial 6.6%
Industry energy24.2%• Iron & Steel 7.2%
• Non-ferrous metals 0.7%
• Machinery 0.5%
• Food and tobacco 1.0%
• Paper, pulp & printing 0.6%
• Chemical & petrochemical (energy) 3.6%
• Other industry 10.6%
Agriculture & Fishing energy1.7%-
Unallocated fuel combustion7.8%-
Fugitive emissions from energy production5.8%• Coal 1.9%
• Oil & Natural Gas 3.9%
Total73.2%

Billions of people rely on petrol and diesel-powered vehicles to get around. As a result, they contribute to almost 12% of global emissions.

But this challenge is also an opportunity: the consumer adoption of electric vehicles (EVs) could significantly help shift the world away from fossil fuel use, both for passenger travel and for freight—although there are still speedbumps to overcome.

Meanwhile, buildings contribute 17.5% of energy-related emissions overall—which makes sense when you realize the stunning fact that cities use 60-80% of the world’s annual energy needs. With megacities (home to 10+ million people) ballooning every day to house the growing urban population, these shares may rise even further.

Agriculture, Forestry & Land Use

The second biggest category of emissions is the sector that we rely on daily for the food we eat.

Perhaps unsurprisingly, methane from cows and other livestock contribute the most to emissions, at 5.8% total. These foods also have some of the highest carbon footprints, from farm to table.

Sub-sectorGHG Emissions Share
Livestock & Manure5.8%
Agricultural Soils4.1%
Crop Burning3.5%
Forest Land2.2%
Cropland1.4%
Rice Cultivation1.3%
Grassland0.1%
Total18.4%

Another important consideration is just how much land our overall farming requirements take up. When significant areas of forest are cleared for grazing and cropland, there’s a clear link between our land use and rising global emissions.

Although many of these energy systems are still status quo, the global energy mix is ripe for change. As the data shows, the potential points of disruption have become increasingly clear as the world moves towards a green energy revolution.

For a different view on global emissions data, see which countries generate the most CO₂ emissions per capita.

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Energy

Mainstream EV Adoption: 5 Speedbumps to Overcome

The pace of mainstream EV adoption has been slow, but is expected to accelerate as automakers overcome these five critical challenges.

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Mainstream EV Adoption: 5 Speedbumps to Overcome

Many would agree that a global shift to electric vehicles (EV) is an important step in achieving a carbon-free future. However, for various reasons, EVs have so far struggled to break into the mainstream, accounting for just 2.5% of global auto sales in 2019.

To understand why, this infographic from Castrol identifies the five critical challenges that EVs will need to overcome. All findings are based on a 2020 survey of 10,000 consumers, fleet managers, and industry specialists across eight significant EV markets.

The Five Challenges to EV Adoption

Cars have relied on the internal combustion engine (ICE) since the early 1900s, and as a result, the ownership experience of an EV can be much more nuanced. This results in the five critical challenges we examine below.

Challenge #1: Price

The top challenge is price, with 63% of consumers believing that EVs are beyond their current budget. Though many cheaper EV models are being introduced, ICE vehicles still have the upper hand in terms of initial affordability. Note the emphasis on “initial”, because over the long term, EVs may actually be cheaper to maintain.

Taking into account all of the running and maintenance costs of [an EV], we have already reached relative cost parity in terms of ownership.

—President, EV consultancy, U.S.

For starters, an EV drivetrain has significantly fewer moving parts than an ICE equivalent, which could result in lower repair costs. Government subsidies and the cost of electricity are other aspects to consider.

So what is the tipping price that would convince most consumers to buy an EV? According to Castrol, it differs around the world.

CountryEV Adoption Tipping Price ($)
🇯🇵 Japan$42,864
🇨🇳 China $41,910
🇩🇪 Germany$38,023
🇳🇴 Norway$36,737
🇺🇸 U.S.$35,765
🇫🇷 France$31,820
🇮🇳 India$30,572
🇬🇧 UK$29,883
Global Average$35,947

Many budget-conscious buyers also rely on the used market, in which EVs have little presence. The rapid speed of innovation is another concern, with 57% of survey respondents citing possible depreciation as a factor that prevented them from buying an EV.

Challenge #2: Charge Time

Most ICE vehicles can be refueled in a matter of minutes, but there is much more uncertainty when it comes to charging an EV.

Using a standard home charger, it takes 10-20 hours to charge a typical EV to 80%. Even with an upgraded fast charger (3-22kW power), this could still take up to 4 hours. The good news? Next-gen charging systems capable of fully charging an EV in 20 minutes are slowly becoming available around the world.

Similar to the EV adoption tipping price, Castrol has also identified a charge time tipping point—the charge time required for mainstream EV adoption.

CountryCharge Time Tipping Point (minutes)
🇮🇳 India35
🇨🇳 China34
🇺🇸 U.S.30
🇬🇧 UK30
🇳🇴 Norway29
🇩🇪 Germany29
🇯🇵 Japan29
🇫🇷 France27
Global Average31

If the industry can achieve an average 31 minute charge time, EVs could reach $224 billion in annual revenues across these eight markets alone.

Challenge #3: Range

Over 70% of consumers rank the total range of an EV as being important to them. However, today’s affordable EV models (below the average tipping price of $35,947) all have ranges that fall under 200 miles.

Traditional gas-powered vehicles, on the other hand, typically have a range between 310-620 miles. While Tesla offers several models boasting a 300+ mile range, their purchase prices are well above the average tipping price.

For the majority of consumers to consider an EV, the following range requirements will need to be met by vehicle manufacturers.

CountryRange Tipping Point (miles)
🇺🇸 U.S.321
🇳🇴 Norway315
🇨🇳 China300
🇩🇪 Germany293
🇫🇷 France289
🇯🇵 Japan283
🇬🇧 UK283
🇮🇳 India249
Global Average291

Fleet managers, those who oversee vehicles for services such as deliveries, reported a higher average EV tipping range of 341 miles.

Challenge #4: Charging Infrastructure

Charging infrastructure is the fourth most critical challenge, with 64% of consumers saying they would consider an EV if charging was convenient.

Similar to charge times, there is much uncertainty surrounding infrastructure. For example, 65% of consumers living in urban areas have a charging point within 5 miles of their home, compared to just 26% for those in rural areas.

Significant investment in public charging infrastructure will be necessary to avoid bottlenecks as more people adopt EVs. China is a leader in this regard, with billions spent on EV infrastructure projects. The result is a network of over one million charging stations, providing 82% of Chinese consumers with convenient access.

Challenge #5: Vehicle Choice

The least important challenge is increasing the variety of EV models available. This issue is unlikely to persist for long, as industry experts believe 488 unique models will exist by 2025.

Despite variety being less influential than charge times or range, designing models that appeal to various consumer niches will likely help to accelerate EV adoption. Market research will be required, however, because attitudes towards EVs vary by country.

CountryConsumers Who Believe EVs Are More Fashionable Than ICE Vehicles (%)
🇮🇳 India70%
🇨🇳 China68%
🇫🇷 France46%
🇩🇪 Germany40%
🇺🇸 UK40%
🇯🇵 Japan39%
🇺🇸 U.S.33%
🇳🇴 Norway 31%
Global Average48%

A majority of Chinese and Indian consumers view EVs more favorably than traditional ICE vehicles. This could be the result of a lower familiarity with cars in general—in 2000, for example, China had just four million cars spread across its population of over one billion.

EVs are the least alluring in the U.S. and Norway, which coincidentally have the highest GDP per capita among the eight countries surveyed. These consumers may be accustomed to a higher standard of quality as a result of their greater relative wealth.

So When Do EVs Become Mainstream?

As prices fall and capabilities improve, Castrol predicts a majority of consumers will consider buying an EV by 2024. Global mainstream adoption could take slightly longer, arriving in 2030.

Caution should be exhibited, as these estimates rely on the five critical challenges being solved in the short-term future. This hinges on a number of factors, including technological change, infrastructure investment, and a shift in consumer attitudes.

New challenges could also arise further down the road. EVs require a significant amount of minerals such as copper and lithium, and a global increase in production could put strain on the planet’s limited supply.

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