Major carmakers are flirting with direct investment in cobalt miners so they have a stable, long term supply of the EV battery ingredient.

Carmakers don’t need their own personal cobalt mines just yet, but “it is certainly a topic of conversation,” Ted Miller, head of energy storage strategy and research at Ford told delegates at the Mining Indaba conference in South Africa.

This follows speculation that Japanese car and battery makers Toyota, Honda and Panasonic are considering a joint venture to secure cobalt for EV batteries.

Mr Miller also reiterated that automakers are trying hard to reduce their dependency on cobalt, which is relatively expensive and primarily mined out of the politically sensitive Democratic Republic of Congo.

READ: The Congo just caused some headaches by hiking cobalt taxes


But cobalt is currently crucial to improving the longevity and safety of lithium-ion batteries, and despite the EV industry’s desire to substitute cobalt out, the demand outlook remains very strong.

Total global cobalt production in 2017 was 110,000 tonnes, with battery use accounting for around 40% of that. Roskill analysts expect cobalt demand from the battery sector alone to reach nearly 100,000 tonnes by 2020 and the market as a whole to reach over 155,000 tonnes.

In 2018, Benchmark Mineral Intelligence also said it expects EV sales growth to “far outweigh” efforts to reduce cobalt in batteries.

It forecasts the use of cobalt in lithium-ion batteries will triple by 2026.

Battery metals streaming company Cobalt27 told Indaba delegates that demand will grow even if cobalt-per-EV content falls from 11kg to to 5kg due to higher nickel, lower cobalt chemistries.

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Source: Cobalt27

‘More upside than downside risk on EV demand’

EVs and battery metals are a hot topic at Indaba this year for good reason.

Up from just 270,000 in 2015, EV sales in 2019 are expected to top 600,000 and should pass 1 million in the next two years, according to Andrew Grant of Bloomberg New Energy Finance.

“There is more upside risk on battery demand than downside,” Mr Grant told Platts.

READ: High Voltage – all the news driving battery metals stocks