NEV battery sales may boost cobalt demand by 56% in 2021: ERG CEO

Publication: S&P Global
Date: 10 September 2021
Author: Diana Kinch
Editor: Kshitiz Goliya

A “staggering increase” in demand for new energy vehicles, or NEVs, may boost cobalt demand from this sector by as much as 56% this year to 35,000 mt, and will continue to have a significant knock-on effect on cobalt demand in coming years, Benedikt Sobotka, CEO of diversified miner Eurasian Resources Group, said Sept. 10.

In a statement emailed to S&P Global Platts, Sobotka highlighted the recent acceleration in electric vehicle sales.

“With the second half of the year expected to see NEV sales grow further as OEMs look to reduce their average fleet emissions in order to meet annual targets, the NEV demand for batteries is expected to reach 237 GWh in 2021. This number would exceed the 2020 total battery demand for all end-use sectors,” the ERG CEO stated.

The battery market is dominated by cobalt-bearing lithium nickel manganese cobalt oxide, or NCM, and lithium-nickel-cobalt-aluminum oxide, or NCA, battery chemistries, accounting for 75% of all installed NEV battery capacity in 2021, according to Sobotka.

This means “the demand for cobalt is only going to increase as we move forward. As a result of this, we estimate cobalt demand of 35kt in 2021, an increase of 56 percent year on year, and expect that this double-digit cobalt demand growth will continue to be supported by NEV demand over the next decade,” he said.

ERG, which is 40% owned by the Kazakhstan government, produces cobalt in the Democratic Republic of Congo and refines cobalt in Zambia. Total cobalt production in the DRC was put at 94,000 mt in 2020, 67% of global production.

LME cash cobalt weekly average prices gained $95.25/mt Sept. 10 to $50,494/mt.noted in research by UK-based EV and market consultancy Rho Motion. In the first seven months of this year, NEV sales have exceeded 3 million units, a year-on-year increase of 150%. Sales in the first seven months were equivalent to 97% of total NEV sales in 2020, he stated.

View the original article here: S&P Global