Cobalt is currently essential for most batteries used in electric vehicles. While the energy transition will reinforce this situation thanks in particular to the growth in sales of electric cars, producing countries such as the DRC have a card to play.
For the first time in history, the annual demand for cobalt from the electric vehicle industry exceeded that of other sectors by 34% in 2021. This was announced by the Cobalt Institute in a rapport published on Tuesday, May 17, stating that this trend will continue in the years to come, bringing the figure to more than 50% by 2026.
« As electric vehicles continue to revolutionize green and sustainable mobility, cobalt-containing batteries are a technology of choice for many automakers in Europe, North America and Chinasays Adam McCarthy, president of the Cobalt Institute. Global demand is also expected to grow from 175,000 tonnes last year to 320,000 tonnes by 2026, a compound annual growth rate of 12.7%.
This new report provides more arguments to the DRC government, the world’s largest producer of the metal with 74% of the supply in 2021, which is seeking to develop a local industry for processing metals such as cobalt or lithium. The aim is to directly supply the electric vehicle market by manufacturing battery materials, in order to earn more revenue.
Despite its dominant position in extraction, the DRC is indeed lagging behind in the other stages of the cobalt value chain. China thus remains the largest cobalt refiner in the world, with 72% of the supply. To achieve its objectives, Kinshasa has notably created the DRC Battery Council and wants to partner with other African producers of strategic metals like Zambia for copper.
If the success of these projects enabled the country to take advantage of the current and future favorable context, the DRC should nevertheless avoid the pitfalls that have so far prevented it from taking full advantage of its natural resources. It is certainly about corruption, but also about contracts “léonins» with foreign groups, without forgetting the non-respect of the laws of the Republic which constitutes a brake on the attractiveness of the country for mining investors.
Ecofin