Wiki commons photo via Alchemist-hp
The Periodic Table is packed with elements of critical importance to US national and economic security. From lithium to iron to uranium, the nation needs a steady supply of minerals and metals, and few are as difficult as the number 27: cobalt.
The most widespread use of the bluish-gray metal today is in the cathodes of lithium-ion batteries, which proliferate in commercial and military devices.
Cobalt also serves the Department of Defense in heat-resistant alloys for jet engines, magnets, stealth technology and electronic warfare, and alloys used in munitions.
And like so many materials and products today, China controls most of the global supply of cobalt.
“What makes it a really significant challenge is that China can use this in the same way that Russia can use oil, or in the same way that the world is affected by grain supplies,” said Brad Martin, director of the RAND Corp.’s institute. supply chain security. China’s ability to deny access to cobalt “creates a national security vulnerability,” he added.
Minerals analysts and US government research say 70 percent of cobalt mined comes from the Democratic Republic of Congo, a politically unstable country with a well-documented history of labor and environmental practices in its mining sector. Almost all the cobalt mined there, usually as a byproduct of nickel or copper mining, goes to China for refining and processing. Today, China processes about 80 percent of the world’s cobalt.
“The big issue is China and its influence in the DRC, and that China understands better than the United States the need to have access to strategic materials,” Martin said. “China is not just finding sources, it’s also been stockpiling, which is not something the United States has done successfully.”
In contrast, the United States has sold large amounts of its stockpile of critical materials such as cobalt in recent decades.
According to the Heritage Foundation report “Revitalizing the National Defense Stockpile for an Great-Power Competition” released in January, the supply was worth $22 trillion – in today’s dollars – of critical materials in 1989. It is now down to $888 million.
However, the repository is not designed to be a solution. Rather, it is a stopgap in the event of a conflict with China or some other shock that disrupts the supply chain.
However, Martin points out that China does not need to resort to military means to get what it wants because it has control over cobalt and other critical materials.
“If China is able to demand political concessions, diplomatic concessions, because it has a hammer over certain sets of assets, it doesn’t have to go to war,” he said. “He already has all the tools of influence he needs to dominate.”
In the short term, the risk to the supply chain is not that significant unless there is a situation that prompts China to cut cobalt supplies, he added. Also, China would lose revenue if the supply of cobalt stopped.
“The main mitigation is the overall state of relations, that no one benefits from cutting supplies within the supply chain because supply chains are interdependent,” he said.
However, this is not a permanent solution. That’s why, over the past five years, successive administrations have made critical materials supply chain resilience a priority through executive orders and policies.
Technically, the Department of Defense does not rely on Chinese cobalt. “For many years, the “specialty metals clause” (10 USC 4863) has required defense contractors and their suppliers to purchase cobalt-base alloys and steel products smelted or produced in the United States with more than 0.25 percent cobalt. Other close US allies” , Pentagon spokeswoman Jessica Maxwell said via email.
“This provides some protection to the defense industrial base for exclusive defense items, but this clause does not apply to commercial products or electronics, among other exceptions,” he added.
And as the Defense Department looks to transition vehicles and bases to renewable sources, that means growing demand for large batteries, which rely on Chinese cobalt.
In March, the Biden administration invoked the Defense Production Act to address the problem of supplying cobalt and other critical materials.
According to the memorandum: “The United States is dependent on reliable foreign sources for many of the strategic and critical materials needed for the clean energy transition, such as lithium, nickel, cobalt, graphite and manganese for high-capacity batteries. Demand for such materials is expected to increase exponentially as the world transitions to clean energy.” as it passes into an economy”.
The United States will secure materials such as cobalt through “environmentally responsible domestic mining and processing; recycling and reuse; and recovery from unusual and secondary sources, such as mine tailings,” the memorandum says.
Domestic mining will be a challenge, according to experts and the US Geological Survey. According to his analysis, more than 120 million tons of cobalt have been identified on the planet. Of these, one million tons live in the US territory. However, the latest USGS cobalt report estimates that only 69,000 tons can be “economically mined or produced,” compared to 3.5 million tons in the Democratic Republic of Congo.
Jervois, Glencore, Electra and U.S. Companies such as Strategic Metals have mining projects in various stages of development in the United States, with Idaho being one of the main focuses. The US government is working to streamline the permitting process for new mining activities.
But experts are skeptical that mining will solve much of the cobalt supply chain problem.
“There are some real challenges in trying to bring mining to the United States in a big way,” Martin said. “And because of the damage it does, it’s not necessarily going to shed a lot of light.”
Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, acknowledged that mining in the United States is a low-yield proposition. Canada and Australia are better prospects, although right now Indonesia appears to be the next big source of cobalt, he added.
“That could be quite a large volume – say over the next 5 to 10 years,” he said. “But the challenge … from a national security perspective is that the majority of investment into Indonesia comes from Chinese companies.”
However, the United States can compete for cobalt from Indonesia – or any other country – by attracting “central” businesses, Rawles said. “So I mean as refiners and cathode producers, because they are commercial entities that will go to the market, and they will secure the raw materials through commercial contracts.”
In other words, they will cut Chinese refiners and producers out of the loop.
“It’s not like direct control of the raw material,” he added. “But you’re sourcing by proxy, if you have a refining company in your country … that company will be looking to sell its products domestically and have the raw materials and inventories of that material.”
The Canadian company Electra is building a refinery that will open in 2022. Next year, it will begin refining 5,000 tonnes of battery grade cobalt per year, according to the company’s website. However, this is a small fraction of the 160,000 tons of cobalt mined each year.
Where analysts see the most potential to tackle China’s cobalt habit is in the production of the metal, through battery recycling and production waste and scrap.
“It could be a very large source of raw materials in the short term,” Rawles said. “What you’re looking at is what we call ‘production residue’ or ‘battery residue.’ And so that’s just non-specification or production cuts of battery materials that then go back into the battery supply chain. “.
Then, as the batteries age and are no longer useful in a car or other device, the batteries can be recycled to re-extract the cobalt and other minerals to create new batteries.
It will take about 10 years for the recycling market to start, he added. “Then, of course, you have large volumes, and you definitely want to make sure that you can store that, process it regionally, and get it back into your chain … into your battery supply chain.”
There are several companies and projects running to recycle scrap metal and spent batteries.
Canadian company Li-Cycle has three recycling facilities in Kingston, Ontario, Rochester, New York and Gilbert, Arizona.
According to a company spokesperson, these facilities are processing 20,000 tons of lithium-ion battery material per year.
The company is building new facilities in Alabama, Ohio, Germany and Norway that will increase production to 65,000 tons by the end of 2023, the spokesperson added.
US company Redwood Materials has formed partnerships with Ford and Toyota to create closed-loop battery recycling and production supply chains.
Redwood expects to produce anode and cathode components to power more than 1 million electric vehicles by 2025 and expand to 5 million vehicles by 2030, the company said in a statement.
Under the Bipartisan Infrastructure Act, the Department of Energy provides nearly $3 trillion to “fund battery materials refining and production plants, battery cell and pack manufacturing facilities, and recycling facilities,” the department said in a press release.
Both the House and Senate versions of the National Defense Authorization Act of 2023 include provisions requiring the Department of Defense to recycle spent batteries.
Government funding will be essential to increasing recycling in the United States, said RAND’s Martin. Establishing collection and transportation networks to take materials to recyclers can be cost prohibitive for the private sector, he said. That’s one of the reasons he argues for more collaborative relationships between industry and government to identify potential supply chain weaknesses early on.
“As companies design products and … supply chains go up, everybody has to be much more aware of where things are coming from and consider these kinds of things up front, and not just walk on a limb,” he said.
“So the medium-term impact or requirement is for government and industry to work better together to find out where their weaknesses are, and where private action can be filled and where it will go. It calls for collective action, for government to do something beyond what individual industry can do. asking”, he added.