German Study Sees Supply Risks for Lithium and Cobalt by 2050

Lithium and cobalt are fundamental components of present lithium-ion batteries. Analysis by researchers at the Helmholtz Institute Ulm (HIU) of the Karlsruhe Institute of Technology (KIT), Germany, shows that the availability of both elements could become seriously critical.

The study suggests that, given the foreseen scaling of battery demand up to 2050, each may face supply risks, albeit for different reasons. The researchers present these results in the journal Nature Reviews Materials as part of a cost and resource analysis of sodium-ion batteries.

Besides lithium as charge carrier, cobalt is a fundamental component of the cathode in present lithium-ion batteries (LIBs), determining the high energy and power density as well as the long lifetime.

“In general, the rapidly growing market penetration of LIBs for electromobility applications, such as fully electric cars, will lead to an increasing demand for raw materials, especially with respect to lithium and cobalt,” said Professor Stefano Passerini, who supervised the study together with Dr. Daniel Buchholz at the Helmholtz Institute Ulm.

Their scenario-based analysis until 2050 for various applications of batteries shows that the shortage and price increase of cobalt are likely to occur, since the cobalt demand by batteries might be twice as high as the today’s identified reserves. Currently, the battery industry already accounts for 50% of the total demand for cobalt. Considering present material mixtures and the scenario with large battery sizes, the estimated number of devices produced by 2050 is calculated to require an amount of cobalt that is twice that of today’s identified reserves. Therefore, in this scenario, the battery industry would place further strain on the already stressed cobalt supply, with today’s identified reserves already found to be strained with regard to the accumulated production of 35 years.

In contrast, today’s identified lithium reserves are expected to be much less strained, but the production will have to be strongly upscaled (possibly more than ten times, depending on the scenario) to match the future demand. However, both elements additionally suffer from strong geographical concentration, moreover in countries which are reported to be less politically stable. According to the researchers, this gives rise to strong concerns about a possible shortage and associated price increase of LIBs in the near future.

“It is therefore indispensable to expand the research activities towards alternative battery technologies in order to decrease these risks and reduce the pressure on cobalt and lithium reserves,” said Mr. Daniel Buchholz. Stefano Passerini, HIU’s Deputy Director. “Post-lithium systems are especially appealing for electromobility and stationary applications. This is why it is both very important and urgent to unlock their potential and develop these innovative, high-energy batteries towards market maturity,” he added.

Cobalt-free battery technologies, including post-lithium technologies based on non-critical elements such as sodium, but also magnesium, zinc, calcium and aluminium, represent possibilities to decrease the dependency and avoid the criticality of lithium and cobalt supplies in the long term, the study stated.

Price decline likely for lithium and cobalt

In another development, prominent commodities research house, Wood Mackenzie, has released a report on battery materials that forecasts a decline in the price of cobalt and lithium this year which would turn into a rout from 2019 onwards.

Wood Mackenzie doesn’t expect decrease in demand; it is forecast to grow from 233 kilotonnes (kt) in 2017 to 330-kt of lithium carbonate equivalent in 2020 and 405-kt in 2022. “The supply response is under way. Yet it will take some time for this new capacity to materialise as battery-grade chemicals. As such, we expect relatively high price levels to be maintained over 2018. However, for 2019 and beyond, supply will start to outpace demand more aggressively and price levels will decline in turn,” the London-based consulting firm said.

According to its data, spot lithium carbonate prices on the domestic market in China are already down 6% from December levels to around $24,500 a tonne while international market prices have remained robust rising to $16,000 at the end of February. The firm sees prices averaging roughly $13,000 this year, dropping to below $9,000 in 2019. By 2022 lithium carbonate is forecast to average $6,500.

According to the report, cobalt demand reached 104-kt last year with nearly half destined for battery makers. The market will grow by an additional 9% this year to reach 113-kt it said and added that by 2022 cobalt demand from batteries alone is predicted to reach 98-kt – or 61% of the overall cobalt market. “While such a figure would have seemed unrealistic a few months ago, the incremental supply from Glencore, ERG and others now means that we expect significant surpluses in the years 2019 to 2022. Naturally, these surpluses will have a downwards effect on price levels. While the likes of Glencore are unlikely to see these excess tonnages fully shipped, the potential supply, together with stock build of hydroxide or metals/chemicals through the value chain, will likely keep a cap on price levels,” the report said.