US Official Raises Concerns as Cobalt Prices Hit Lowest Level Since 2019
As the United States aims to reduce China’s stronghold on critical metals essential for the transition to clean energy, cobalt prices have plummeted to their lowest point since 2019. With cobalt being a vital component in lithium-ion batteries and utilized in various industries including aerospace and defense, the current oversupply in the market is hindering the efforts of Western companies to compete with China’s dominance.
Highlighting the issue, a US official from the State Department, involved in the Minerals Security Partnership, expressed worries about the implications of the oversupply. The global output of cobalt reached 230,000 tons last year, with China responsible for processing nearly 80% of the metal, creating a surplus of 14,200 tons.
Indonesia, another major producer of cobalt, is looking to double its production in the coming years by expanding nickel mining operations. On the other hand, Australian miner Jervois Global Ltd. has already felt the impact of the low cobalt prices, cutting jobs and closing projects due to the oversupply in the market.
Despite the current challenges, the Cobalt Institute report forecasts a surge in demand for cobalt, particularly driven by the electric vehicle industry, leading to an eventual rise in prices. Even Congo, a primary producer of cobalt, is considering imposing export quotas to boost prices.
As the industry braces for instability in prices and production, the need for strategic partnerships and investments in responsible supply chains becomes imperative to ensure a sustainable and competitive cobalt market in the future.
