China’s plans to build 5 million electric vehicles (EVs) by 2020 faces a bumpy road as the Congolese war chokes off supplies for cobalt — a critical ingredient in the batteries that power EVs. A shortage could also throw a wrench into a Japanese and South Korean push to manufacture EVs.
Korea JoongAng Daily reports that the Congo’s cobalt production dropped significantly starting last year due to political instability from an ongoing civil war, low cobalt prices and limited supply and distribution.
The Korea Mineral Resources Information Service says there are an estimated 7 million tons of known cobalt reserves in the world. About 3.4 million tons, or nearly half, are in the Democratic Republic of the Congo.
Cobalt accounts for 30 percent of the total cost of producing EV batteries and the price has recently surged.
Cobalt traded on the London Metal Exchange at about US$32,750 a ton earlier this year, Bloomberg reported last week, and has jumped to US$59,000 a ton as of Monday.