Net-zero future grows cobalt supply

Once called ‘goblin ore’ by German miners searching for tin, cobalt has been used to colour glass, glaze and pottery blue since the Ancient Egyptians and Chinese.

In modern day, this lustrous silver-blue metal can make powerful magnets, which are critical for battery technology. Although cobalt is often a by-product of copper and nickel mining, the crucial role it plays for a net-zero future means that supply is set to grow.

In 2019, nearly 70 per cent of all cobalt was mined in the Democratic Republic of Congo – far above that of the 4 per cent from Australia – despite being a supply chain fraught with ESG and geopolitical concerns. As demand for the metal is set to hit 222kt by 2025, according to a report from McKinsey & Company, concerns regarding the long-term supply availability to power the Electric Vehicle demand have been raised.

Battery-powered future

Current global reserves of cobalt are estimated at more than 7,100,000 metric tons by the United States Geological Survey, despite less than 10 per cent of all cobalt being mined as a primary goal. Due to this reliance on other ‘host’ metals – like copper and nickel – current production levels have kept the market and supply small, despite cobalt being considered a critical mineral by global governments.

The main potential cobalt has is that, when alloyed with iron, nickel and other metals, it creates an alloy named Alnico. With unusual permanent magnetic strength, this alloy is used in electric motors to convert electric energy into mechanical energy.

As the extensive green initiatives proposed by governments initiate aggressive development of renewable energy infrastructure, smart grids and a large electric vehicle industry, the need to ramp up cobalt availability has already started, reflected in the recent jump in demand and price. Understanding this, Bloomberg New Energy Finance has estimated that by 2030, global demand could reach 47 times higher than in 2017.

The Australian opportunity

Although Australia’s cobalt output is far below the DRC currently at 4 per cent, there is a real chance for Australian nickel-cobalt resources to increase that supply up to 19 per cent. An Argus Media report has noted that Australia’s cobalt sector is expected to grow by 5.3 per cent every year, on average, between 2021 and 2029.

With Australia’s robust nickel industry already in place, there is great potential for local miners to create a stable supply chain for cobalt with very little fuss. International investments from companies and traders that adhere to standards set by the Responsible Minerals Initiative and Responsible Cobalt Initiative will also help facilitate this.

Dreadnought’s potential

Dreadnought’s Kimberley and Mangaroon projects are situated in areas of recognised Ni-Cu-Co and Cu-Ag-Au-Co potential.

The Orion discovery in the Kimberley contained high grade cobalt while Dreadnought’s other projects in the Kimberley have Ni-Cu-Co-PGE potential and the Money Intrusion Earn-in / JV with FQM is currently exploring for Ni-Cu-Co-PGEs at Mangaroon.