Benchmark Minerals projects a four-fold rise in cobalt demand from battery megafactories by 2028

Feb 6, 2019

Encouraging testimony about cobalt from Simon Moores, Managing Director, Benchmark Mineral Intelligence, before the U.S. Senate Committee on Energy and Natural Resources on Tuesday Feb. 5, 2019.

Excerpts from his written testimony

“Benchmark Mineral Intelligence is now tracking 70 lithium ion battery megafactories under construction across four continents, 46 of which are based in China with only five currently planned for the US. When I gave my last testimony in October 2017, the global total was at 17.”

“Almost exclusively, these megafactories are being built to make lithium ion battery cells using two chemistries: nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminium (NCA). This means the supply of lithium, cobalt, nickel and manganese to produce the cathode for these cells, alongside graphite to produce battery anodes, needs to rapidly evolve for the 21st century.”

Simon Moores showed a chart on page 2 of his presentation that is based on the assumption that all of these megafactories are build and run at 100% capacity utilization. The table on the chart showed that the battery factory demand for cobalt would rise as follows:

2017: 54,354 tonnes cobalt

2023: 219,679 tonnes cobalt

2028: 276,401 tonnes cobalt

“Under this scenario, lithium demand will increase by over eight times, graphite anode by over seven times, nickel by a massive 19 times, and cobalt demand will rise four-fold, which takes into account the industry trend of reducing cobalt usage in a battery.”

So, where is all this cobalt going to come from to meet demand?

While Simon Moores did not address the production side, other projections show that there is not enough being currently produced or expected to be produced in expansions to come anywhere close to meeting this demand. Thus, while the cobalt price is suffering temporarily from some oversupply at present, it will need to stay elevated for a prolonged period of time to encourage new mines, like Canada Cobalt’s Castle Mine, to be brought into production.

(Keep in mind the overall need for cobalt is much higher as these figures are only for the battery megafactories. Other sectors, such as jet engine, phone and computer manufacturers, will also need their share. Battery demand in 2017 at 54,000 was about half the total demand from all sectors around the world of 110,000 tonnes.)

Simon Moores testimony is available at

https://www.energy.senate.gov/public/index.cfm/files/serve?File_id=9BAC3577-C7A4-4D6D-A5AA-33ACDB97C233

or from the list of presenters at https://www.energy.senate.gov/public/index.cfm/hearings-and-business-meetings?ID=FA12E5D1-59E5-4DC9-A96B-EF5949C00B1D

Best regards,

Wayne