Demand for cobalt is expected to outstrip supply and lead to a deficit by the early 2030s, according to the latest report from the Cobalt Institute, a trade association comprising producers, users, recyclers and traders of cobalt.
This change is driven by the growing use of cobalt in electric vehicle (EV) batteries and various industrial applications.
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In 2024, cobalt demand surpassed 200,000 tonnes (t) for the first time, experiencing a year-on-year increase of 14% and the most robust annual growth since 2021.
The cobalt market surplus in 2024 stood at 36,000t, or 15% of demand, an increase from 25,000t in 2023.
The Democratic Republic of Congo (DRC), the leading global producer of cobalt, recently imposed a four-month export ban, aiming to address the surplus and bolster cobalt prices.
Since the ban, prices have surged by 60% to $16/lb. The future of the cobalt market is now closely tied to the DRC’s next move post-ban, according to a Reuters report.
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By GlobalDataFurthermore, the cobalt surplus, which has kept prices low, is forecast to diminish in the coming years due to increased demand.
Cobalt demand, excluding government stockpiling, is set to grow at a compound annual growth rate (CAGR) of 7%, reaching 400,000t by the early 2030s, primarily fuelled by the expansion of the EV market.
By 2030, EVs are predicted to comprise 57% of cobalt demand, up from 43% in 2024, with other applications such as mobile phones, laptops and superalloys experiencing more moderate growth.
According to the report, the anticipated cobalt deficit underscores the need for immediate investment in the short term to meet future market requirements.
The report stated: “Securing access to essential critical minerals is at the top of the world’s agenda, and cobalt is part of the solution to ensuring industrial growth, national security and a low-carbon economy. Urgent action is needed to build reliable and responsible cobalt value chains to secure cobalt supply.”
Despite uncertainties surrounding the DRC’s export policies, global cobalt supply is projected to grow at a CAGR of 5% in the coming years.
The DRC’s dominance in the market is expected to decrease from 76% to 65% by 2030, while Indonesia’s share is set to rise from 12% to 22%.
Furthermore, artisanal mining in the DRC has hit an all-time low, accounting for less than 2% of the market in 2024, and is not anticipated to regain its former market share.
This decline is attributed to the prolonged period of low prices, increased industrial mining and formalisation efforts within the country.
Cobalt Institute director general Dinah McLeod said: “While artisanal mining is closely linked to poverty and corruption, for many it is the only viable job opportunity in the region. The challenge isn’t to eliminate it, but to make it fair, safe and free from human rights issues.”
