The rollout of fifth-generation (5G) wireless telecom networks around the world has led to a need for equipment that can run at higher speeds and increased efficiencies. This further ushered in a switch towards the use of new metal compounds over the old silicon-based technology. The rising penetration for 5G enabled smartphones, which require larger batteries typically, contain greater volumes of cobalt on a per unit basis. This has boosted the demand for cobalt supply and this is expected to go up over the coming years and even affect the supply of the rare metal to electric vehicles. Cobalt is used along with lithium as cathode rods in rechargeable batteries.
The larger batteries using the lithium cobalt combination are needed by 5G enabled devices to transmit and receive the stronger radio waves. Base station antennas for 5G also require significantly more power, necessitating the use of larger energy storage systems, which are now being built with cobalt-containing lithium-ion batteries.
Cobalt Supply can meet demand for EV
"5G will be a major source of cobalt demand in the years ahead," said George Heppel, analyst CRU, which expects cobalt demand for portable devices to rise to 73,000 tons by 2025 from 45,000 tons this year.
"Down the road we are likely to see some aggressive bidding for cobalt from electric vehicles and mobile phones, where there isn't really chemistry that can compete with LCO."
Cobalt demand estimates mostly vary between 100,000 and 130,000 tons for this year, doubling to between 200,000 and 260,000 tons in 2025.
Cobalt production is supposed to be adequate this year to see the demands till 2022, though a deficit is expected from 2022 as sales of electric vehicles and 5G phones accelerate.
"As the global transition to 5G technology gathers pace, growth in non-EV markets has significant potential to expand across two fronts: portables and energy storage systems," analysts at Benchmark Mineral Intelligence said in a note.
"Demand growth for energy storage systems has already overtaken electric vehicles, albeit starting from a much lower base, and Benchmark forecasts stationary storage demand to grow by 35 percent per annum through the 2020s."
Congo is responsible for two-thirds of global cobalt production, and it has not seen much disruption in production or delivery through the Pandemic. And it is expected to keep up the supply.
A study by a team from MIT, Alfred University, UC Berkeley, and RIT found that supplies of cobalt is adequate in the short-term (up to 2030), but that the industry needs to invest in additional efficient refining and recycling capacity, so it can continue to meet demand.
The research said the cobalt demand will range from 235 to 430 ktons in 2030. They predict that the future cobalt supply will become more diversified geographically and mined more as a byproduct of nickel (Ni) over this period. The team suggests that to have a sustained supply, investments should be made in refined supply of cobalt and recycling.