A new book just out on the hazardous world of primitive cobalt mining in the DRC, the world’s largest cobalt-producing nation, is having quite an impact on the 2023 mining sector. Not to mention the all-electric,carbon-free, greentopia of 2030 envisioned by green thought leaders such as our favorite engineer/ entrepreneur Elon Musk, who made an admirable LFP pivot with Tesla . That was sure to give the iron supply chain a high-voltage jolt back in 2021. But it’s no shock to us here at Resource Erectors that the US mining sector is recharging the cobalt market in a big way after 30 years out of the circuit.
OK, now that we’ve used up all of our all-electric puns quota for the week, it’s time to take a serious look at cobalt and what it takes to extract the designated critical mineral that the world’s rechargeable batteries rely upon. At least for now. The LFP (Lithium Iron Phosphate) trade-off to reduce cobalt demand involves a significant energy-density penalty that reduces EV range, but it’s cheaper.
That’s how cobalt’s energy-dense superiority originally knocked the older rechargeable LFP cell technology to the R&D back burners in the opening decades of the green transition. Major automotive players such as GM, Ford, and Volksawagen loathed to reduce the already limited range of their available EVs in a reluctant market raised on the extended range and reliability of good old fossil fuel cars and trucks and a place to refuel on every busy corner.
The Democratic Republic of Congo: DRC and Dirty Rotten Cobalt
Fellow Siddharth Kara, of Harvard’s T.H. Chan School of Public Health, and also a fellow at the Kennedy School, exposes modern-day slavery and human trafficking that’s been going on for two decades in his new book “Cobalt Red: How the Blood of the Congo Powers Our Lives”.
According to good fellow Kara, there’s no such thing as a “clean” cobalt supply chain from the DRC, the nation that just happens to have more cobalt reserves than the rest of the planet combined. Whether a massive cobalt reserve is a blessing or a curse is yet to be determined.
Cobalt Red discusses “artisanal” miners in the DRC who extract cobalt for just a few dollars a day, working in dangerous and inhumane conditions”.
Which leaves the door wide open for major mining players in Australia and the US to show the DRC and the world exactly how it’s done.
Joint US/Australia Mining Venture in Idaho Links Into the Cobalt Critical Supply Chain
Jervois Global Ltd, a major mining player in nickel and cobalt out of Australia is launching the first US cobalt mining operation in Idaho in 30 years. The anticipated mine production is 2,000 tons of mined cobalt a year, in the new green world where global cobalt demand is projected to grow from 127,500 tons in 2022 to 156,000 tons in 2030. That’s down a taf from previous projections accounting for the OEM shift to LFP.
Jervois Global and the US Cobalt Boomerang Strategy
An export now, import later strategy takes advantage of the “up to $250 billion” USD loan program, a green handout incentive which cost US taxpayers $5 billion to set up even before one green cent was issued. We’re guessing that Jervois Global won’t be the only US cobalt operation for long.
The funds were earmarked under the Inflation Reduction Act of 2022, subsection “Energy Infrastructure The Inflation Reduction Act incentives”. As a result, the Idaho mine’s concentrated cobalt is slated to be exported and converted into refined products outside the US before re-entering into the US consumer market. Free trade agreements with the US are mandatory for any nation who wants a slice of this green pie.
According to Jervois CEO Bryce Crocker. “The mineral sits at the top of the table” in terms of national security.” Bryce is certainly qualified to guide the Idaho operation with an impressive Linked-in resume that frankly makes a heavy industry recruiter drool including:
- Seasoned mining and natural resources executive
- Experience across bulk and base commodities
- Precious metals and oil and gas.
- Oil and gas industry experience in commercial roles with ExxonMobil and BHP Petroleum.
- Moved into corporate banking, with ANZ Investment Bank, with a focus on natural resources.
With all that to bring to the table, Jervois Global will be one major mining player to watch.
The Cobalt to LFP Shift: Will it happen in 2023?
While Jervois brings modern cobalt processes to the critical mineral mining table, the Congo’s “under-the-table” reputation for cobalt exploitation and slave-labor could easily prove itself to be a major geopolitical disruption. We saw a scramble to lock up cobalt supplies last July of 2022.
US auto manufacturers with big green plans like General Motors Co. and Ford Motor Co. have already intensified the race to lock in cobalt supplies by signing direct deals with producers of battery metals. While LFP may play a role as automakers toss a green bone to appease the greenster agenda with a few “entry-level” vehicles, the significantly longer range of cobalt-based cells may be a difficult bone for EV engineers to drop. Especially if that cobalt bone is dug up anywhere in the world excluding the DRC.
“While more than two-thirds of the mined metal comes from the Democratic Republic of Congo, there’s been an increasing shift among manufacturers to source cobalt from outside the African nation due to allegations of corruption, human rights abuses and the use of child labor there.”
After the past few years of geopolitically induced supply chain disruptions, Jervois Global CEO Croker is leading the charge to humane cobalt extraction processes with the mission statement from his company’s website;
Jervois aims to become the leading global supplier of responsibly sourced cobalt and nickel materials to serve both the battery and chemicals markets, and to provide a secure, reliable supply to customers in the face of geopolitical and other risks.” Jervois Global
Green Alert: Elon Musk Pivots to Lithium Iron (Ferrous) Rechargeable Batteries
As we’ve mentioned many times in the past here at Resource Erectors, it ain’t easy being green. But sometimes everything old is new again, as we’ve seen with agnostic fuel R&D for diesel engines, and hydrogen fuel cell technologies that take zero emission power to a new level.
Now iron-based rechargeable batteries are getting another look, as controversial cobalt falls out of favor. Apparently, Elon Musk was again one step ahead of the problem going all the way back to 2021. That’s when he went bullish on iron, saying at the time that Tesla was making a “long-term shift” toward older, cheaper lithium-iron-phosphate (LFP) cells in its energy storage line, as well as some entry-level EVs.
So what attracts OEMs and energy storage providers to iron-based cells like filings to a magnet? According to the informative 2021 article ”What Tesla’s bet on iron-based batteries means for manufacturers” at TechCrunch, “ Powerwall and Megapack are “in line with other stationary energy storage companies pushing for iron-based formulas”.
The Attraction of LFP Batteries For OEM Industry and Infrastructure
- LFP battery cell production is not dependent on scarce and price-volatile raw materials like cobalt and nickel.
- LFP cells are less energy-dense than nickel-based chemistries but LFP batteries are much cheaper.
- LFP batteries reduce the cost per vehicle to boost affordable EV adoption.
And guess who has the LFP monopoly in the world right now? We’ll give you a hint about Part 2 coming next week.
The country’s name rhymes with “mina”.
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