The Cobalt Bottleneck

Key Takeaways

1. 1Cobalt enhances energy density and thermal stability in lithium-ion battery cathodes (NCA and NCM chemistries) — making it central to the EV revolution
2. 2EV battery demand has more than doubled in under a decade as global production surged from 2 million to 14+ million vehicles annually
3. 3The DRC produces roughly 70% of global cobalt supply — no other critical commodity shows comparable dominance by a single nation, creating extreme geopolitical concentration risk
4. 4Supply disruptions from labour strikes, political unrest, or export restrictions in the DRC pose immediate risks to Western EV and aerospace supply chains
5. 5Price volatility is severe: cobalt jumped from $8 to $25+ per pound in 2018 then crashed back to $6 in 2019 — annual swings of 30–50% are common
6. 6Annual supply and demand both hover around 140,000 tonnes with minimal buffer — the market has almost no slack to absorb unexpected disruptions
7. 7Beyond batteries (~50%), cobalt serves jet engines (~25%), industrial catalysts (~10%), and other high-performance applications — diversifying but not reducing the pressure
8. 8Lithium iron phosphate (LFP) batteries eliminate cobalt entirely and are rapidly gaining share in mass-market EVs, representing a structural long-term demand threat
9. 9Recycling infrastructure is still in its infancy at ~5% recovery rates — long-term it could contribute 10–20% of supply, but that transition will take decades
10. 10Multiple governments have designated cobalt a strategic critical mineral, prompting national stockpiling programmes and investment in alternative battery chemistries