Cobalt

Material criticality in context

Cobalt's criticality stems in part from the fact that it is rarely mined for itself. Approximately 99% of cobalt is produced as a by-product of copper or nickel mining, with only a small share coming from operations where cobalt is the principal product.⁸⁴ As a result, higher cobalt prices do not necessarily generate a corresponding increase in supply. Cobalt output depends on the combined economics of multi-metal operations, including copper and nickel prices, rather than on cobalt prices alone.⁸⁵ The consequence is a fundamental disconnect between cobalt supply and cobalt demand. When cobalt prices rise, production does not necessarily expand, because economics are largely determined by copper and nickel markets rather than cobalt alone. Conversely, cobalt supply can contract when copper or nickel production weakens, even without any change in cobalt demand.⁸⁶ This by-product dependency is important because it weakens the relationship between price signals and supply response.

This structural constraint is compounded by a concentrated supply chain. One country has supplied the majority of global mined cobalt for decades and is projected to remain the dominant source over the medium term, while refining is concentrated even more heavily in another.⁸⁷ Cobalt is therefore exposed to supply-chain risks from multiple sources: the by-product dependency described, and the geographic concentration of extraction and processing, both of which are vulnerable to political instability, export restrictions, and infrastructure disruption.⁸⁸

The human and environmental dimensions of cobalt production further reinforce its criticality. A significant share of production in the dominant mining region comes from artisanal and small-scale mining, often operating informally with limited oversight, where documented concerns include child labour, fatal pit and tunnel collapses, and forced labour.^{89 90} Industrial-scale extraction presents different but substantial challenges: cobalt mining is among the most emissions-intensive mineral production activities, while expansion has contributed to deforestation, heavy-metal contamination of air, water, and soils, and associated impacts on surrounding communities.^{91 92} These impacts cannot be addressed through circularity alone, but they strengthen the case for reducing reliance on marginal primary supply and managing future demand growth.

Cobalt's applications reflect its distinctive physical properties. Its ability to maintain strength and magnetism at high temperatures supports its use in jet engine and gas turbine superalloys, cutting and drilling hardmetals, and permanent magnets.⁹³ More recently, however, lithium-ion battery cathodes have become the dominant source of cobalt demand, with electric vehicle batteries and energy storage systems accounting for the majority of consumption. Unlike some of the other battery materials examined in this study, cobalt faces substantial substitution pressure. Battery manufacturers have increasingly reduced cobalt content through higher nickel chemistries and alternative cathode technologies, driven by concerns around cost and reputational risk.⁹⁴

Material flows and application structure

This Sankey diagram maps how cobalt moves from refined metal and chemicals through its material streams into applications and final end uses. The diagram is interactive: selecting any stream or application traces the flows connected to it. This is a conceptual visual showing the approximate distribution of cobalt across material streams, applications, and end-uses. It shows the structure of the cobalt system in 2020, when batteries had become the largest end-use segment. Other established applications included superalloys, hardmetals, permanent magnets and chemicals used in catalysts, pigments, and drying agents. As the midstream analysis demonstrates, this balance changes over the projection period, with the battery and superalloy streams following increasingly different trajectories rather than growing in tandem.