The Democratic Republic of the Congo — the central African country that produces the majority of the world’s cobalt — has hiked the price of royalties required to purchase the metal by 3x.
Now, lithium-ion battery barons including Apple, Samsung, BMW, and Volkswagen find themselves saddled with a pricey premium on a mandatory manufacturing material.
Since 60% of global cobalt comes from the Congo, mining companies in the DRC knew global buyers had few options. So they did what any self-respecting global commodities trader would do: Increased prices.
After the price of cobalt tripled in just 18 months, major buyers including Apple and Samsung launched direct-to-the-source partnerships with Congolese mining companies this year to ensure continued access to the magic mineral.
Since cobalt is a crucial component of the batteries that power both smartphones and electric vehicles, major buyers will have to continue buying the marked-up minerals… at least for now.
Some buyers, like Tesla and Panasonic, have committed to reducing reliance on the “blood diamond of batteries” by investing in the development of alternatives such as solid-state and sodium-ion (instead of lithium) batteries.
But since most scientists believe viable alternatives are still about 10 years away, most big buyers will still be riding the cobalt carousel for a while yet.