A 20% rise in the price of cobalt since the beginning of this year shows how the rush to build more electric vehicles is stressing global supply chains.
Already a shortage of semiconductors is slowing the recovery in auto production. Now cobalt, a blue metal that is needed for many types of batteries including those in EVs, is a concern, according to people in the auto and battery industries and analysts.
“The demand is not going to shrink any time soon, while the supply remains tight mainly due to logistics disruptions in South Africa during the pandemic,” said Ying Lu, an analyst at London-based commodity research firm Roskill.
Energy-dense cobalt is used as the stabilizer in batteries. It helps protect the battery’s cathode from corrosion that can lead to a fire.
A majority of the world’s cobalt is mined in the Democratic Republic of the Congo in central Africa. It typically is carried overland to South Africa, shipped out from the port of Durban, South Africa, and processed in China before the material goes to battery makers—meaning the supply chain has several choke points that make it vulnerable to disruption.
