EV popularity leads to Cobalt shortage

As the number of electric vehicles continues to grow, so does the demand for cobalt – a key element in producing lithium-ion batteries.

There is currently a supply squeeze following several years of surplus production, CNBC reports.

The price of Cobalt rose to US$55,270 (NZ$78,200) per metric ton on Thursday – a 154% jump from its all-time low price in February 2016.

Strong demand for EVs from China is one of the key reasons for the price hike Rebecca Charlton, chief financial officer (CFO) of China Molybdenum (CMOC) told CNBC.

It is a natural resources company which now controls 15% of the cobalt market after recent acquisitions.

“Obviously there’s huge buzz around the electric car space but I think what’s interesting in China is they’re looking at the electric-led automobile as going beyond cars and into public transport.

“If you think about the number of large population cities in China you get into some really interesting dynamics from that perspective,”

There has been a decrease in cobalt production from countries like Australia, Russia and Zambia in recent years, while few new sources have been found, CNBC reports.

The Democratic Republic of Congo is now the largest known source of cobalt.