The United States makes several alliances to secure the global cobalt supply chain.
Among these alliances, two stand out: one with the Democratic Republic of Congo (DRC) and the other with Japan.
According to a study conducted by the Benchmark Minerals Institute in collaboration with the Cobalt Institute in 2022, the battery market comprises a large portion of cobalt demand. This market includes both consumer batteries and batteries for portable electronic devices (smartphones, tablets, etc.), as well as electric vehicles.
In total, it accounts for 70% of global cobalt demand. Moreover, between 2021 and 2022, it was responsible for 86% of the increase in cobalt demand. This sector continues to show strong growth, with a compound annual rate of 33% year-on-year.
Cobalt supply chain
According to the Environmental Protection Agency (EPA), the DRC is the world’s largest source of cobalt, with 70% of current world production and 48% of reserves.
The United States is partnering with the DRC to secure cobalt supply to close the gap between projected domestic demand and projected domestic supply.
Through PGI, the United States is supporting the development of the Lobito Corridor, which connects the Democratic Republic of Congo and Zambia to global markets through Angola, with an initial investment of $250 million in a rail expansion that aims to reduce transportation time and lower costs for metal exports from the region.
Critical minerals
On March 28, 2023, the United States and Japan signed a critical minerals agreement (CMA) covering five key minerals related to the production of batteries for clean vehicles (commonly referred to as electric vehicles). The U.S.-Japan CMA became effective immediately upon signing.
The critical minerals covered by the CMA are cobalt, graphite, lithium, manganese and nickel, all of which are key inputs for electric vehicle batteries.
A little more about this mineral: the unique properties of cobalt and cobalt-derived products are responsible for their broad applications in energy storage, industry and other areas. These characteristics include its high energy density, ability to alloy and impart high temperature strength and ferromagnetic properties.