Global Trends Affecting the Supply Security of Cobalt

"The earliest known use of cobalt was to make blue glass in Mesopotamia before 2000 B.C.E. Since then, innovations across many diverse industrial sectors transformed cobalt into an essential commodity for contemporary society. The physical and chemical properties of the element cobalt and its alloys and compounds make them indispensable for a variety of applications, including aircraft engines, hybrid electric vehicles, machine tools, missile guidance systems, petroleum refining and smartphones. As a major industrialized nation, the United States is a leading consumer of cobalt and cobalt-containing products. However, with few exceptions, U.S. cobaltcontaining ore deposits are of low cobalt grade. Historically, U.S. cobalt mine and refinery output have not met domestic cobalt demand. As a result, U.S. cobalt chemical and alloy producers need to procure most of their cobalt from the international market, which can become susceptible to supply risk.The 1978 Cobalt Crisis illustrates supply risk. At that time, the Democratic Republic of the Congo (DRC) (then known as Zaire) was the world’s leading producer of mined and refined cobalt. An insurgent invasion of the country’s copper-cobalt mining region during a period of high cobalt demand and low producer inventories caused a temporary supply shortage in the international market. The monthly average cobalt spot price increased from $18/ kg ($8/lb) before the crisis to $99/kg ($45/lb) seven months later. The high price and concern about potential disruptions in supply prompted manufacturers to reduce or substitute for cobalt where possible, and encouraged increased recovery of cobalt from scrap. The DRC has regained its position as the leading producer of mined cobalt globally and continues to be characterized by high governance risks (U.S. Central Intelligence Agency, 2015; World Bank, undated). This article will present current and historical world cobalt production trends, which can help inform discussion about the variety of international supply chain risks consequential to its trade."