Abstract:
Copper and cobalt are essential metals for various industries, from electronics and transportation to construction and infrastructure. With increasing battery production and a shift towards renewable energy, the demand for these metals has risen significantly. However, the supply of copper and cobalt is becoming increasingly constrained due to several factors, such as declining ore grades, labour disputes, and political instability in key mining regions- with a Supply Gap Scenario predicted for as early as 2030. This paper discusses the implications of the copper and cobalt supply gap for industries and economies worldwide and proposes innovative solutions to address this problem.
Introduction:
Copper and cobalt are critical metals that play a crucial role in the functioning of various industries. Copper is a versatile metal that has many practical applications in industries such as construction, plumbing, and electrical wiring. In fact, copper is one of the most widely used metals in these fields due to its excellent conductivity and durability. According to the Copper Development Association, approximately 65% of copper that is produced globally is used for electrical wiring and electronics, while the remaining 35% is used for a variety of other purposes, such as plumbing, roofing, and construction. With its ability to conduct electricity and withstand corrosion, copper is an essential material for creating reliable and efficient electrical systems, as well as durable piping and construction materials. Overall, copper’s versatility and strength make it an indispensable resource for many industries around the world.
Cobalt is an essential component in rechargeable batteries, particularly those used in renewable energy technologies such as electric vehicles, wind turbines, and solar power systems. Cobalt is used as a cathode material in these batteries, which means it helps to store and release energy during the charging and discharging cycles. The demand for cobalt has surged in recent years due to the increasing popularity of electric vehicles and the growing demand for renewable energy sources. According to a report by Bloomberg New Energy Finance, demand for cobalt is expected to increase tenfold by 2030, driven primarily by the growth of the electric vehicle market.
However, the supply of copper and cobalt is facing significant challenges through the end of this decade, and the demand for these metals is expected to rise in the coming years. This paper explores the implications of the copper and cobalt supply gap and proposes innovative solutions to address this problem.
Causes of the Copper and Cobalt Supply Gap:
The copper and cobalt supply gap has several causes, from both the demand and supply sides. On the demand side, the massive increase in battery production and a shift towards electric vehicles have led to a surge in the demand for cobalt. One of the primary reasons is the increase in demand for copper due to the growing use of renewable energy technologies, such as solar panels and wind turbines, which require significant amounts of copper wiring. Additionally, the increasing demand for electric vehicles has also contributed to the rise in copper demand, as these vehicles require more copper than traditional gasoline-powered vehicles.
Achieving decarbonization targets in the global energy sector will necessitate a significant increase in the deployment of clean energy technologies involving Copper and Cobalt. The STEPS and SDS scenarios of the International Energy Agency suggest that the growth rate of clean energy technologies should be between 10% and 40% annually.
On the supply side, declining ore grades, labour disputes, and political instability in key mining regions have made it more difficult and expensive to maintain yields using extensive chemical extraction processes. For instance, the Democratic Republic of Congo (DRC) is the world’s largest producer of cobalt, but the country has faced significant challenges in developing its mining sector and ensuring responsible practices throughout the value chain- ultimately this has made it extremely difficult for the major electronics manufacturers to procure DRC cobalt whilst maintaining compliance with modern ESG principles.
Contributing to the copper supply gap is the declining quality of copper ore reserves. As easily accessible reserves are depleted, it becomes more difficult and expensive to extract copper from the remaining reserves, resulting in a decline in production levels. Additionally, geopolitical factors such as trade disputes, labour strikes, and regulatory changes can also impact copper supply, as they can disrupt the flow of copper from producers to consumers.
Implications of the Copper and Cobalt Supply Gap:
The copper and cobalt supply gap has significant implications for industries and economies worldwide. Rising ore prices on supply constraints will lead to higher costs for manufacturers and consumers, while shortages can disrupt supply chains (especially in the renewables sector) and impede economic growth. The shortage of cobalt and copper can also delay the development and adoption of key technologies, such as electric vehicles and renewable energy systems, which are essential for reducing greenhouse gas emissions and mitigating climate change.
Innovative Solutions to Address the Copper and Cobalt Supply Gap:
Addressing the copper and cobalt supply gap will require innovative solutions, from exploring new mining methods to developing alternative materials that can replace copper and cobalt in key applications. For example, end product manufacturer and turning towards Lithium as a cobalt alternative. Key amongst these include the adoption of new emergent technologies, that our services aid in optimising- including coarse particle recovery and sulfide leaching.
At Pure Trade, we aim to be part of the solution by providing supply chain and chemical supply solutions which enable copper and cobalt producers to allocate their resources towards the production of their outputs and not the management of their inputs. By providing an efficient supply chain, we can help cobalt and copper producers focus on increasing their production output, which can lead to a more stable supply of these critical metals.
Conclusion:
The copper and cobalt supply gap is a significant problem that requires innovative solutions to address. As the demand for these metals continues to rise, it is crucial to ensure a stable supply chain that can meet the growing demand. At Pure Trade, we are committed to being part of the solution by providing efficient supply chain solutions that enable copper and cobalt producers to focus on increasing their production output. By working together, we can ensure a stable supply of these critical metals and pave the way for a more sustainable future.