The Democratic Republic of Congo is set to be in a very profitable position as the world shifts towards a preference for electric vehicles, as the country produces more than half of the global supply of a raw metal crucial to the industry.
The country supplies 54 percent of the world’s cobalt, and the need for the metal is growing steadily as demand for electric cars increase, according to ScitechAfrica.
Listen to GHOGH with Jamarlin Martin | Episode 38: Tony Effik
Jamarlin talks to Tony Effik, SVP of Client Strategy at NBCUniversal, about where the digital media business is going. Tony talks about directing strategy across the largest multi-billion dollar media portfolio, opportunities with subscriptions, and the business of podcasting.
Cobalt is not mined like other natural resources, as it is only produced as a by-product of mining copper and nickel, which is why the vast majority of the element is produced in the DRC.
Cobalt is a major component of the rechargeable lithium-ion batteries that are used within electric vehicles, as the properties within the element allow for the battery to be recharged efficiently, according to MachineDesign.
Demand is high because global trends show that electric vehicles are the mode of transport of the future, with government policies and corporate decisions by car manufacturers aimed at guiding the relatively new technology to mass market status.
Swedish car brand Volvo led the charge in 2017, when it announced that it would only release new models that are electric or plug-in hybrids by this year, according to TheGuardian.
From a government perspective, both France and the U.K. decided that they would be banning sales of gas and diesel-powered cars by 2040, forcing manufacturers to look at their plans for electric vehicles very seriously, according to CNN.
The geological scarcity of cobalt is a massive opportunity for the Democratic Republic of Congo, which controls over half of the world’s current supply.
The production of raw cobalt that came out of the Democratic Republic of Congo was 66,000 metric tons in 2016 and 64,000 metric tons in 2017, accounting for around 54 percent of the global total in those years, according to Statista.
The rechargeable battery industry accounts for around 42 percent of global cobalt production, according to Techcrunch.
This means that the DRC alone could handle the demand for electric vehicle batteries, as well as all other cobalt-related battery requirements.
Carmakers, such as BMW and Volvo rely on cobalt for their production of electric cars, but other electronics manufacturers such as Apple also need the rare metal, which has tripled in price over the past year to around $80,000 a ton, according to Forbes.
The demand for cobalt for batteries is growing worldwide and across industries, with electric vehicles in particular showing steady growth and demand, and the Democratic Republic of Congo would do well to take full advantage of their overwhelming market share of the raw metal that is becoming more precious by the day.
#1 Macroeconomic Newsletter For Black America