WHAT IS IT?
Cobalt is a lustrous, silver-grey hard metal found in the Earth's crust only in chemically combined form. It is a critical mineral for the energy transition, primarily used in lithium-ion battery cathodes. Approximately 70% of global cobalt supply comes from the Democratic Republic of Congo (DRC).
SUPPLY CONCENTRATION RISK
DRC dominance creates significant geopolitical risk:
Political instability, artisanal mining with human rights concerns
Chinese companies (CMOC, Huayou, Zhejiang Huayou) control majority of DRC cobalt operations
China controls ~80% of cobalt refining globally
KEY USES
EV Battery Cathodes (largest and fastest-growing use): NMC (Nickel-Manganese-Cobalt) cathodes. NMC 811 (80% Ni, 10% Mn, 10% Co) reduces cobalt content vs older NMC 111.
Superalloys: Jet engines, gas turbines — cobalt provides strength at extreme temperatures
Hard metals: Cemented carbide cutting tools
Magnets: Samarium-cobalt permanent magnets
COBALT REDUCTION TREND
Battery manufacturers actively working to reduce cobalt due to cost and ESG concerns:
LFP (Lithium Iron Phosphate) batteries — zero cobalt. Growing rapidly for EVs and energy storage, especially in China.
NMC 811 vs NMC 111 — reducing cobalt per kWh
Sodium-ion batteries — no cobalt
Long-term cobalt demand growth is uncertain as battery chemistry evolves.
TRADE CORRIDORS
Major producers: DRC (70%+), Russia, Australia, Philippines
Major refiners: China, Finland (Freeport Cobalt), Belgium (Umicore)
Major buyers: China, Japan, South Korea (battery manufacturers)
PRICING BASIS
LME Cobalt contract exists but illiquid. Physical market priced on Fastmarkets (formerly Metal Bulletin) assessments. Spot price in USD/MT or USD/lb.
SPECIFICATIONS (Cobalt Briquettes)
Cobalt: min 99.8%
Nickel: max 0.05%
Standard form: briquettes or rounds