U.S. to Revive Cobalt Mining After 30 Years Amid Booming EV Demand

U.S. cobalt mining is set to restart after nearly 30 years on the back of growing demand for electric vehicles (EVs). Jervois Global is set to start the country’s first cobalt mine in Idaho on Friday. Company chief executive Crocker said cobalt is currently one of the top minerals for the United Stats in terms of national security. He added that there are not many new sources of cobalt supply, particularly in safe jurisdictions, which adds to the importance of the new mine. Cobalt hasn’t been mined in the United States since at least 1994, according to U.S. Geological Survey.

Cobalt, a crucial material for EV batteries, is on the U.S. list of critical minerals. The Biden administration sees adoption of EVs as one of the most important targets in its energy transition efforts. Recently, the state of New York joined California in banning the sale of gasoline powered vehicles in the coming decades. However, the supply of raw materials, such as cobalt, is struggling to keep up with booming EV demand, causing a shortage of materials needed in batteries and pushing automakers to race for new supplies.

In July, General Motors and Ford stepped up efforts to secure supplies by signing direct deals with producers of battery metals.

Currently, more than two thirds of the world’s cobalt is mined in the Democratic Republic of Congo. But manufacturers have been increasingly trying to stay away from the African nation due to allegations of corruption, human rights abuses and use of child labor.

The passage of the Inflation Reduction Act also provides incentives for battery materials sourced in the U.S. EVs can qualify for a $7,500 tax credit under Biden’s climate and tax bill, as long as their batteries contain minerals extracted from or processed domestically or in a country with a free trade agreement with the U.S., and providing part of the components are made or assembled in North America.

Crocker said they expect the Idaho mine to produce around 2,000 tons of cobalt a year. The concentrated cobalt will then be exported and converted into refined products outside the U.S. before ultimately brought back into the US to serve customers, he added.

Jervois, which owns a nickel and cobalt refinery in Brazil, is also talking to third parties in countries such as Canada and Australia to convert the mined mineral. About 80% of global refining is concentrated in China, but capacity is growing elsewhere, including at Finland’s giant Kokkola refinery, which is also owned by Jervois.

Cobalt demand is estimated to grow from 127,500 tons in 2022 to 156,000t in 2030, as a result of the shift to iron-based batteries by major automakers.

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