Q&A: A life in the cobalt market

The international cobalt industry has evolved significantly in the past 40 years, with the metal once treated as a specialised alloying element but now stepping forward as a battery material crucial to the automotive energy transition. Argus spoke with David Weight, the long-serving and recently retired president of the Cobalt Institute, about how the industry has developed during his tenure and some of the challenges the market will need to rise to in the coming years. Edited highlights follow:

How has the cobalt industry changed since you began 40 years ago? The market that I grew up with was largely metallurgical. The largest use of cobalt was for high performance alloys, super-alloys, hard metals, high speed steels, prosthetic alloys and magnets — all important sectors then. There has been a significant change with magnets, as ceramics forms overtook cobalt, but broadly those other uses have remained. The old market is still there, but there is a larger catalyst market out there now. The biggest change, of course, is the rise of batteries and that has changed the whole market dynamic. More than 50pc of cobalt end use now is in the battery market. This became apparent in the mid-2000s and started to dominate in the next decade, firstly with portable electronics and now the new market for electric vehicles (EVs).

The Democratic Republic of Congo (DRC) has always been the largest producer, with around 50-60pc of the world's refined cobalt, while Zambia historically produced about 25pc. About 75pc of all refined cobalt came from that region when I started and then the market was only around 25,000t — now it has grown to more than 130,000 t/yr.

How is Covid-19 affecting the DRC and how are producers dealing with it? I am obviously aware of the issues but we at the Cobalt Institute are one step removed from the mining firms there because they are primarily copper or nickel mines and downstream processes or users. Our focus is further downstream, looking more closely at responsible sourcing and safe use in production and processing. I'm well aware that the mining companies themselves are taking appropriate action with regards to Covid-19. It is very difficult though, in a country like the DRC as the virus could potentially have devastating consequences.

Have you ever seen anything like what is happening in aerospace now in all your years in the cobalt market? No, this is quite extraordinary. The aerospace industry has been quite resilient throughout various recessions over the years, but this is completely new to me. The industry itself is very resilient though, so once Covid-19 is gone, this may be a hiatus rather than a long-term problem for the industry. But I have never seen anything like this so it is difficult to comment.

You recently launched responsiblecobalt.org — how will that help the industry to cleanse its image? The key thing over the past few years in cobalt has been the increasing pressure from civil society and regulators to demonstrate responsible sourcing. There are no primary cobalt mines, and our mining members are producing nickel and copper. Responsible sourcing concerns mainly refer to artisanal and small-scale mining in the DRC. But as an industry we needed to show responsibility and leadership, so we created the Cobalt Industry Responsible Assessment Framework (CIRAF). It is not a standard, but a framework to allow due enhancement of diligence and confer both coherence and consistency in reporting responsible sourcing.

Our members are expected to apply the CIRAF and they have started to report on that now. CIRAF prompts you to have a materiality assessment and to check where your risks are in your supply chain, mitigate those risks and then publicly report how you are managing any potential risks. There are in total nine risk areas in the CIRAF, the most basic of these being human rights. We are also working with other industry standards such as the Copper Mark, the LME and RMI to cross reference with the standards and work together as an industry.

How is the Chinese market responding to responsible sourcing initiatives? There has certainly been progress in China, I think what Huayou did in publicly implementing responsible sourcing was progress very helpful. The difficulty is that China is rather enigmatic because it is not as open as countries in the west, so forming relationships and applying responsible sourcing standards is more difficult. Huayou came under so much external pressure that they just decided to stop taking any artisanal material.

How do we solve the problem of artisanal mining? This is an extremely difficult question and, unfortunately, artisanal mining is not going to go away as it provides a livelihood to many people who have almost nothing. Therefore, industry and civil society needs to embrace the issue and not ignore or seek to prevent it. It has been going on for generations in the DRC, not just for cobalt but also copper and other precious metals and minerals. International civil society, the mining industry and the DRC government have a responsibility to help those people help themselves.

The big mining companies can play an important part in helping that country help the people, and our industry can demonstrate to civil society that cobalt can be responsibly sourced. It should be understood that more than 90pc of the world's cobalt comes from large-scale industrial mining, not artisanal and small scale. Also, artisanal and small-scale mining is not illegal, but it is certainly poorly regulated. If the legal artisanal sector can be helped to help itself then that would improve livelihoods.

How is the cobalt institute going to go forward after you retire? We have completely reorganised the institute in the past 2-3 years. We have a completely new membership structure and a new management team. With me stepping away, Adam McCarthy — who was our vice-president of government and public affairs — is now stepping into my shoes. We are now working more effectively on a global basis, with a much better communication network and a strong team looking at regulation, responsible sourcing, sustainability and other important issues for the industry. Our budget has also tripled in the past few years, which shows the intent of the membership. We and our members are well positioned to protect market access for cobalt as we guide the industry into the energy transition.

It has been a very complex period, regulators have not been sleeping and cobalt issues have not died away during the pandemic. Luckily with modern technology we have been able to remain fully open and effective. The tragedy is that we have not been able to hold our conference in Madrid and various member meetings. It has not really impaired our functioning, but we have not been able to bring all elements of the cobalt industry together so that will be a loss. I am hoping that will only be temporary, but it is all a bit surreal currently.

How do you view Tesla's recent decision to enter a cobalt deal with Glencore? It is not necessarily a question about Tesla, but battery chemistry as a whole. The battery of choice for the industry is a lithium-ion based battery. There are other chemistries and they are developing all the time, but the major investments have gone into lithium-ion batteries, so for the foreseeable future, cobalt is an essential element in making EV mobility a commercial reality. Cobalt provides stability within the battery cathode, it allows for multiple recharges and also there is a safety element too as cobalt prevents thermal excursions when running high current densities.

By Thomas Kavanagh

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