Artisanal mining practices in the DRC (Source: Washington Post, Financial Times)
From the DRC’s mines to the latest products
So how exactly does cobalt from the DRC’s mines and other sources move into the rest of the world’s consumer electronics? Companies such as Zhejiang Huayou Cobalt are responsible for a significant level of cobalt processing and production. Huayou Cobalt produces cathodic precursors (e.g. high purity cobalt sulphate heptahydrate) to supply to cathode manufacturers, who in turn sell the cathodes to battery cell and pack manufacturers. Ultimately, electric vehicle and consumer electronic companies utilize these lithium-ion battery cells and packs in their end products.
Manufacturers have recently increased their efforts in supply chain due diligence and tracking. A recent report from Amnesty International, Time to Recharge
, has ranked industry leaders such as Apple, Samsung, Microsoft, BMW and Tesla on how these companies have worked to improve unethical cobalt sourcing in the last several years. Nonetheless, there is still a significant amount of work to be done to protect human rights abuse and prevent child labour in areas like Kolwezi in the DRC.
Supply chain dynamics and the recycling of lithium-ion batteries
With the recent boom of cobalt demand due to its extensive use in smartphones, laptops and in the rapidly growing applications of electro-mobility, cobalt prices have recently risen to over $42.50 per lb.
(over $93,700 per metric tonne) as of March 2018. Alongside, the DRC plans to double tax rates
on cobalt as well, which could inhibit mining investment in the country.
By 2020, lithium-ion batteries are forecasted to account for 60% of annual global production of cobalt. As battery and vehicle manufacturers ramp up their operations globally, cobalt supply has had trouble rapidly responding to demand. Although there are a variety of companies exploring new primary mining sources of cobalt, it will likely take years to bring any new discovery into production
. Manufacturers have sought long-term supplies of cobalt; however, the inelastic supply dynamics of cobalt have proven difficult to overcome.
Projected cobalt supply and demand (Source: Bloomberg New Energy Finance, USGS, Avicenne, CRU)
Could the recycling of lithium-ion batteries mitigate the current and near-term cobalt supply challenges? In short, yes – by 2025, lithium-ion battery recycling could meet 20% of the forecasted global demand for cobalt
. In turn, lithium-ion battery recycling will reduce the social and environmental impacts of artisanal mining in the DRC. Moreover, recycling can mitigate drastic price swings in cobalt and other critical materials, as well as the reliance on mining and refining into the future.
Li-Cycle Technology™ is uniquely positioned to enable the maximized recovery of cobalt and other critical materials through recycling lithium-ion batteries, due to its closed loop nature. Subsequently, recovered materials are re-integrated into the lithium-ion battery supply chain and the broader economy. In turn, Li-Cycle is enabling a completely transparent and ethical supply chain for 100% recycled cobalt and other critical materials.
The recycling of cobalt from lithium-ion batteries is playing an important role in supply chain diversification and will increasingly do so into the future.