LONDON (Bywire News) - In 2019, sales of electric vehicles soared by over 90%. The market is booming and growth is almost certain to continue as the world seeks to move from petrol to electric cars. The battery will be the shining light of the new economy as the world seeks to move to cleaner forms of electricity. Unfortunately, this new age relies on Cobalt which can only be found in one of the most unstable parts of the world. A new arms race is on to dominate the supply of Cobalt and China is already well in the lead.
Battlefield DRC
More than two thirds of the cobalt mined in the world comes from the Democratic Republic of Congo, which has never managed a successful transition of power. Child labour, slavery and other abuses are common according to human rights groups and tracing the supply can be difficult. For now at least, the new economy is underpinned by many of the same evils as the old. The reality is, your iPhone/Android Phone should cost $10,000, but it doesn’t, and that is allegedly due to slavery and poor working conditions, happening right now, today.
Over the last few years, China has moved to establish a dominant position within DRC mining. Earlier this year DRC’s state-owned mining company Gecamines opened the Deziwa Copper and Cobalt mining company in a joint venture which is majority owned by the China Nonferrous Metal Mining Company. The Deziwa deposit, which is around 35km east of Kolwezi, is thought to hold around 4.6 million tonnes of coper and 420,000 tonnes of cobalt.
In total, eight of the 14 companies mining in the DRC are Chinese owned, but it doesn’t stop there. China dominates the entire supply chain.
Once Cobalt has been mined, it goes to refiners who produce cobalt metal and power, which are used for super alloys in jet engine, or cobalt sulphate which is used for batteries. Here, China’s position is even more dominant, controlling 80% of the world’s cobalt chemical refining capacity. There are also a host of mega factories springing up across China dedicated to assembling the Cobalt components into a battery. Much of the world’s production is now moving to China which now has a ready supply of components and the capacity to put them together.
Their ethos is simple. Control the cobalt supply, and you control the future. Without cobalt there is no electric car market or mobile device market, which means it is virtually impossible without Chinese involvement.
The dark prince
Other sinister figures looking to profit from the Cobalt rush include Eric Prince who has been looking to invest in the discovery and exploitation of resources to profit from electric car batteries. Prince says his intentions are benign. He hopes to establish an ‘ethical cobalt mine’ in which all miners are treated well, get decent pay and enjoy safe working conditions. Businesses who invest in this project, he said, would be able to trace how cobalt is sourced and be comfortable that the cobalt powering their batteries had not been dug out of the ground by hand by a child wearing nothing more than a loin cloth.
Unfortunately, fully tracing an ethical source of cobalt is extremely difficult. Traders have been filmed buying cobalt without verifying its origin before sending it to be traded around the world. Prince’s own track record is hardly a source for confidence. He founded the military contractor Blackwater which allegedly committed war crimes in Afghanistan after 9/11. He has also helped to provide troops to the UAE whose military is currently committing alleged heinous war crimes in Yemen. He also attempted to provide a private airforce for the repressive government of South Sudan. Donald Trump is also reported to have considered establishing a private spy network designed by Prince and Oliver North who was convicted for his part in the Iran Contra scandal. He also faced scrutiny for meeting with Russian and UAE officials shortly before Trump’s inauguration to discuss back channels between Moscow and Washington.
This is not a person who lies awake at night worrying about human rights abuses unless there’s a way to profit from them.
The conclusion is stark. The lithium battery will control the future and this is controlled by people and organisations with a history of committing crimes and allowing human rights abuses on a vast scale. For everyone in the West, the prospect of being beholden to a country (China) which is becoming increasingly powerful and routinely commits crimes against its own population is very real indeed.
Breaking the grip
Loosening this grip is an economic, social and political imperative and there is work underway. The response of the USA has been to introduce the Onshoring Rare Earths (ORE) Act to try and break their reliance on Chinese Cobalt. The Act aims to encourage a supply chain for these materials within the USA and to push the Department of Defence to source these materials domestically.
However, this will be challenging. The supply chain is long and complicated and China has already embedded itself deeply into the market. Breaking that grip will be no easy task.
The alternative is to reduce the reliance on cobalt for lithium batteries. The world’s major producers of electric cars are already looking to do this, for economic reasons if nothing else. Cobalt is more expensive than lithium or nickel and no company wants to be reliant on a country with the track record of DRC.
The industry is racing to replace cobalt and sever its dependence on China and the DRC. Boston based start-up Ionic materials, for example, counts Renault, Nissan, Mitsubishi, Total and Hyundai among its backers.
We’re seeing them moving towards nickel-based batteries. However, this contain chemical properties which shorten battery life and carry concerns about incendiary risks. More promise can be found in solid state batteries, but progress so far has been disappointing.
Engineering cobalt out of the manufacturing process of batteries is not going to happen in the short term, which means the world will have to find ways to tackle the growing dominance of China in the manufacture and supply of batteries.
(Written by Tom Cropper, edited by Michael O'Sullivan)