Cobalt: A Precarious Supply Chain
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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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Oil and Gas

How Affordable is Gas in Latin America?

This graphic looks at gas affordability in Latin America, showing how much a liter of gas costs in 19 countries, relative to average incomes.

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How Affordable is Gas in Latin America?

As gas prices have risen around the world, not each region and country is impacted equally.

Globally, the average price for a liter of gas was $1.44 USD on June 13, 2022.

But the actual price at the pump, and how affordable that price is for residents, varies greatly from country to country. This is especially true in Latin America, a region widely regarded as one of the world’s most unequal regions in terms of its income and resource distribution.

Using monthly data from GlobalPetrolPrices.com as of May 2022, this graphic by Latinometrics compares gas affordability in different countries across Latin America.

Gas Affordability in 19 Different Latin American Countries

To measure gas affordability, Latinometrics took the price of a liter of gas in 19 different Latin American countries and territories, and divided those figures by each country’s average daily income, using salary data from Statista.

Out of the 19 regions included in the dataset, Venezuela has the most affordable gas on the list. In Venezuela, a liter of gas is equivalent to roughly 1.3% of the country’s average daily income.

CountryGas price as of May 2022 (USD)% of average daily income
🇳🇮 Nicaragua$1.3714.0%
​🇩🇴​ Dominican Republic$1.4112.6%
🇧🇷​ Brazil$1.4312.5%
🇵🇾​ Paraguay$1.3912.2%
🇵🇪 Peru$1.5310.2%
🇺🇾 Uruguay$1.929.8%
🇸🇻​ El Salvador$1.149.2%
​​🇭🇳​ Honduras$1.338.6%
🇲🇽​ Mexico$1.177.8%
🇬🇹​ Guatemala$1.447.7%
🇦🇷 Argentina$1.066.7%
​🇨🇱​ Chile$1.376.6%
🇨🇷​ Costa Rica$1.425.9%
🇨🇴 Colombia$0.585.7%
​🇵🇦 ​Panama$1.275.0%
🇪🇨 Ecuador$0.674.1%
🇧🇴 Bolivia$0.543.2%
🇵🇷​ Puerto Rico$1.352.2%
🇻🇪​ Venezuela$0.021.3%

This isn’t too surprising, as Venezuela is home to the largest share of proven oil reserves in the world. However, it’s worth noting that international sanctions against Venezuelan oil, largely because of political corruption, have hampered the once prosperous sector in the country.

On the other end of the spectrum, Nicaragua has the least affordable gas on the list, with one liter of gas costing 14% of the average daily income in the country.

Historically, the Nicaraguan government has not regulated gas prices in the country, but in light of the current global energy crisis triggered in large part by the Russia-Ukraine conflict, the government has stepped in to help control the situation.

As the Russia-Ukraine conflict continues with no end in sight, it’ll be interesting to see where prices are at in the next few months.

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Energy

Mapped: Which Ports are Receiving the Most Russian Fossil Fuel Shipments?

Russia’s energy exports have become a hot topic. See which ports received fossil shipments during the first 100 days of the Ukraine invasion

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As the invasion of Ukraine wears on, European countries are scrambling to find alternatives to Russian fossil fuels.

In fact, an estimated 93% of Russian oil sales to the EU are due to be eliminated by the end of the year, and many countries have seen their imports of Russian gas plummet. Despite this, Russia earned €93 billion in revenue from fossil fuel exports in the first 100 days of the invasion.

While the bulk of fossil fuels travel through Europe via pipelines, there are still a number marine shipments moving between ports. The maps below, using data from MarineTraffic.com and Datalastic, compiled by the Centre for Research on Energy and Clean Air (CREA), are a look at Russia’s fossil fuel shipments during the first 100 days of the invasion.

Russia’s Crude Oil Shipments

Much of Russia’s marine shipments of crude oil went to the Netherlands and Italy, but crude was also shipped as far away as India and South Korea.

world map showing the top ports receiving russian crude oil

India became a significant importer of Russian crude oil, buying 18% of the country’s exports (up from just 1%). From a big picture perspective, India and China now account for about half of Russia’s marine-based oil exports.

It’s important to note that a broad mix of companies were involved in shipping this oil, with some of the companies tapering their trade activity with Russia over time. Even as shipments begin to shift away from Europe though, European tankers are still doing the majority of the shipping.

Russia’s Liquefied Natural Gas Shipments

Unlike the gas that flows along the many pipeline routes traversing Europe, liquefied natural gas (LNG) is cooled down to a liquid form for ease and safety of transport by sea. Below, we can see that shipments went to a variety of destinations in Europe and Asia.

world map showing the top ports that received Russian liquefied natural gas

Fluxys terminals in France and Belgium stand out as the main destinations for Russian LNG deliveries.

Russia’s Oil Product Shipments

For crude oil tankers and LNG tankers, the type of cargo is known. For this dataset, CREA assumed that oil products tankers and oil/chemical tankers were carrying oil products.

world map showing the top ports that received Russian oil product shipments

Huge ports in Rotterdam and Antwerp, which house major refineries, were the destination for many of these oil products. Some shipments also went to destinations around the Mediterranean as well.

All of the top ports in this category were located within the vicinity of Europe.

Russia’s Coal Shipments

Finally, we look at marine-based coal shipments from Russia. For this category, CREA identified 25 “coal export terminals” within Russian ports. These are specific port locations that are associated with loading coal, so when a vessel takes on cargo at one of these locations, it is assumed that the shipment is a coal shipment.

world map showing the top ports that received Russian coal shipments

The European Union has proposed a Russian coal ban that is expected to take effect in August. While this may seem like a slow reaction, it’s one example of how the invasion of Ukraine is throwing large-scale, complex supply chains into disarray.

With such a heavy reliance on Russian fossil fuels, the EU will be have a busy year trying to secure substitute fuels – particularly if the conflict in Ukraine continues to drag on.

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