A blistering rally in the cobalt market is turning into a rout, putting pressure on miners and offering tentative cost relief for carmakers after a surge in battery metal prices last year…Cobalt rallied sharply early in 2022 as demand for electric vehicles surged. But while automotive usage is still rising, there’s been a sharp drop-off in buying from another key sector — Chinese electronics — and cobalt prices have crashed more than 50% since a peak in May…Pound for pound, the batteries used in laptops, phones and tablets contain much more cobalt than EV batteries, and demand from the industry has fallen about 30% to 40% over the past year, according to researcher Rystad Energy…For carmakers, cobalt’s boom-to-bust swing will have a minor impact on the cost of batteries, when compared with other materials like lithium, which is used in much greater volumes and is still trading at sky-high levels…The pressure is particularly evident for producers of cobalt hydroxide, a semi-refined product that accounts for the bulk of global supply. It typically trades at a discount to the pure metal, but the gap has widened dramatically in recent months — in some cases, miners are only getting paid for a little more than half of the cobalt contained in the hydroxide they sell, down from about 90% a year ago…The challenges that have come with cobalt’s wild swings are emblematic of broader commercial growing pains being experienced by miners, consumers and financiers in the markets for battery metals. Unlike much larger commodity markets like copper and oil, cobalt has been nearly impossible to hedge in large volumes until recently, and so the gyrations seen in the past few years have been particularly painful for carmakers on the way up, and for miners on the way down. This time, though, buyers and sellers have been flocking to a CME Group cobalt contract to hedge their exposure, setting the stage for a potentially seismic shift in the way the industry manages its price risks.

Securing the supply chains for electric vehicle (EVs) batteries and their requisite minerals has become a key priority for the United States as it seeks to facilitate clean energy deployment, revitalize industrial competitiveness, and reduce undue reliance on a supply chain dominated by China…The Inflation Reduction Act (IRA), which became law in August 2022, provides strong support for this effort…Specifically, under the consumer tax credit for EVs, half of the $7,500 credit ($3,750) is available if 50 percent of the battery components (by value) are manufactured or assembled in North America while the other half of the credit is available if battery minerals are extracted, recycled, or processed in the United States or a country with a free trade agreement (FTA)…Notably, the law also prohibits the application of EV tax credits where components or critical materials are sourced from China…The onshoring and nearshoring provisions appear to be raising investment interest in the United States…Most recently, General Motors has announced a $650 million investment to help develop a massive lithium deposit at Thacker Pass in Nevada, marking another significant step in the growing ties between automotive and mining industries in the United States, as U.S. automakers seek to secure domestic battery mineral supplies to fuel EV production that would meet the new IRA EV consumer tax credit…One factor that is quite certain, however, is that China is not standing still. Both the Chinese government and the industry are focused on securing its EV battery supply-chains and expanding its EV value chains. According to the International Energy Agency’s latest Energy Technology Perspectives, China accounts for most of the announced manufacturing capacity expansion plans to 2030 for EV battery components, including 98 percent for anode and 93 percent for cathode material such as cobalt (95 percent), lithium (60 percent), and nickel (60 percent)…Indeed, China’s effort to secure and expand its EV battery supply chains is not confined at home. China is transforming itself into the world’s battery factory…The U.S. campaign to expand the domestic EV battery supply chains has also underscored a complex nature of U.S.-China rivalry in the EV battery value-chains…First and foremost, U.S. automakers remain interested in engagement with China. After all, China is the largest EV market in the world, accounting for about 60 percent of the global EV sales in 2022. Moreover, China is currently the main source of competitively priced EV batteries. 

Did you know that EVs need up to six times more minerals than conventional cars? EVs are mineral-intensive and are pushing up demand for critical battery metals. According to the International Energy Agency (IEA), lithium, nickel, and cobalt demand is expected to grow from 10%-20% to over 80% by 2030…As countries around the world pledge to go all-electric by 2035 and 2040, do we have enough mineral supply for EV demand?...Factors such as geopolitical concentration of resources, quality of materials, mining industry lead times, and environmental factors will together determine whether we have the minerals we need.

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Mitsubishi Materials will begin commercial recycling of rare metals such as cobalt and lithium from used lithium-ion batteries taken from electric vehicles, starting in fiscal 2025, Nikkei has learned. The Japanese company aims to increase its processing capacity to 6,000 tonnes per year by around fiscal 2030…It is technically difficult to extract lithium and other materials at low cost, especially from lithium-ion batteries…Mitsubishi Materials and its partner, Envipro Holdings, will develop a technology to recover rare metals efficiently from batteries by soaking powder from batteries called "black mass" in sulfuric acid and other solutions. Mitsubishi Materials aims to improve the efficiency of the extraction process, drawing on its expertise in copper smelting…Approximately 500 tonnes of cobalt can be recovered from 6,000 tonnes of black mass, depending on the composition of the batteries to be recycled…Japan relies on imports of both cobalt and lithium for batteries, and the industry sees it as imperative to create a system to recycle resources domestically to foster widespread adoption of EVs…The investment is expected to come to several billion yen, or tens of millions of dollars. The project will also collect used batteries from hybrid vehicles and home appliances, and is expected to gradually increase the share of used EV batteries that it collects. The recycled metals will be sold to producers of raw materials for batteries. Japan's Dowa Holdings, through a subsidiary, will also set up a business to extract lithium and other rare metals from black mass as soon as in 2024, while JX Nippon Mining & Metals has started a demonstration project to recover high-purity nickel and cobalt, and will expand the scope of the project to include high-purity lithium by the end of fiscal 2022 ending in March this year. Sumitomo Metal Mining will commercialize recycling, including cobalt, as early as in fiscal 2024.

Volvo Cars said it had “no need” to join Tesla and Ford in cutting prices for its electric models after sales tripled last year. During 2021, about 4 per cent of Volvo Cars’ sales were battery-only models. This rose to 11 per cent during 2022, and was as high as 20 per cent in December. The brand wants half of its sales to be pure battery vehicles by the middle of the decade, with the aim of only selling electric cars by 2030, one of the most ambitious targets of any major carmaker…Rowan said he expected lithium prices to drop this year and Volvo might cut prices in response. A significant drop in lithium prices would “[give] us the opportunity to make that decision”, he said. But “we don’t see the need” to cut prices he added, because of the volume of EV orders Volvo Cars has on its books.