Rechargeable battery technology has existed since 1859. Today, it is an increasingly critical component of consumer electronics, electric vehicles and renewable energy storage. This transformation is dependent on the widespread availability of some specific raw materials. We wonder: Which of the following frequently used materials is most likely to involve significant geopolitical risk?
A. Lithium … is not correct.
Overall, lithium is probably the least geopolitically risky of these four metals commonly used in various types of rechargeable batteries. Demand for it is expected to double between 2017 and 2020.
The largest lithium production currently comes from Australia, Chile and Argentina. The largest reserves are in those countries, as well as in China.
Chinese and Australian mining companies also have lithium operations in other countries with smaller deposits. Zimbabwe, where a recent coup forced out longtime strongman Robert Mugabe, is one such country. Zimbabwe is now the fifth-largest lithium producer worldwide, although well behind the leading four.
While plentiful in broad terms, lithium does not always appear in economically viable concentrations for mining, according to Mining Weekly. The prices for battery-grade lithium carbonate for mining companies ranged in 2017 from $18,000 to $25,000 per ton, due to high demand and extraction viability challenges.
However, the amount of lithium in each electric vehicle’s power pack is quite small and represents just a fraction of the cost per battery.
Many automakers – and battery researchers at institutions such as MIT – hope to find technologies less reliant on minerals that can be economically or politically difficult to obtain in sufficient volumes.
B. Cobalt … is correct.
Cobalt is the rechargeable battery component that is most geopolitically risky to obtain. By a wide margin, production and reserves of cobalt are centered in the Democratic Republic of the Congo (DRC). It is a byproduct of mining for copper there, which is also used in renewable energy technology.
The country supplies 65% of global cobalt currently. One-fifth of that production is mined by hand in “artisanal” mines. This means the miners are subsistence contractors and the mine is not owned by a company with industrial equipment, unlike the byproduct mining at copper mines.
In a sign of the rapidly growing importance of this raw material, Germany’s VW Group, one of the world’s three largest automakers, solicited bids in 2017 for companies to supply 50 billion euros worth of cobalt over 10 years.
Cobalt was selling at around $30 per pound at the time on the open market. The company’s bid terms for cobalt supply specify that any bidders have to take measures to prevent the use of child labor in DRC.
Apple is taking similar steps to negotiate cobalt mining contracts to supply its phone battery production.
DRC is the world’s 11th-largest country by land area and the largest in sub-Saharan Africa. The government is headed by strongman Joseph Kabila. He recently triggered violent protests by delaying presidential elections indefinitely and aspiring to remain in power permanently.
Concern over the security of mines and safety of the miners in DRC will remain as cobalt production expands significantly there.
This could push cobalt suppliers to shift to other countries with byproduct cobalt at existing mines for other metals. Automakers and battery developers also might decide it is safer and more cost-effective to find alternatives to cobalt entirely.
C. Manganese … is not correct.
Manganese is probably less geopolitically risky to obtain compared to the other major rechargeable battery ingredients. At the moment, the leading producer-countries are South Africa, China and Australia.
However, the locations of the largest manganese reserves in the world are not without risk. South Africa, Ukraine and Brazil are all mature emerging markets with young democracies. They also all struggle with endemic corruption at the highest levels, which is often raw material-related.
Another African nation, Gabon, the world’s fourth-largest manganese producer, is also an example of resource exploitation and corruption like South Africa. The country became independent in late 1960 and barely three years later experienced a military coup. One family has ruled Gabon continuously from 1967 to present. Despite huge oil revenues flowing into the country for decades, little of the wealth made it to ordinary citizens.
Gabon’s oil is about to run out, but the mining of rechargeable battery materials offers a continued path forward for the ruling family, along with timber exports.
D. Nickel … is not correct.
Not all nickel is suitable or currently commercially viable for battery uses. Canada and Australia are the key producers of nickel sulfide, which can be processed more readily for battery uses. Nickel ore from less geopolitically secure countries tends not to be the kind used for batteries.
Since cobalt is also sometimes associated with nickel mines as a byproduct, some nickel mines might become more useful in battery production for their cobalt than for their nickel directly.