CMOC Group Ltd., the world’s largest cobalt producer, has raised concerns over the shrinking role of cobalt in electric vehicle (EV) batteries. The Chinese company, which has been producing cobalt at a faster pace than rivals such as Glencore Plc, predicts that cobalt will become significantly less important in the energy transition.
The rise of cobalt-free lithium iron phosphate (LFP) batteries, which are cheaper to produce, has contributed to this shift. According to consultancy CRU Group, the percentage of EV batteries in China containing cobalt is expected to drop to 31% in 2024, down from 44% just two years ago.
“We predict that EV batteries will never return to the era that relies on cobalt,” said CMOC spokesman Zhou Xing, noting that the proportion of batteries containing cobalt could eventually fall to less than 10%.
The company’s outlook is further influenced by an oversupply of cobalt, driven largely by its expansion of copper-cobalt mines in the Democratic Republic of Congo. While CMOC has been ramping up production, it has caused cobalt prices to fall to their lowest levels since 2016. Glencore, the previous leader in cobalt production, has scaled back output at its Mutanda asset in the DRC.
CMOC’s expansion strategy, while positioning the company for future copper demand, has led to a significant drop in cobalt profits, despite its aggressive production targets.