Battery-Grade Cobalt Refining Market Assessment
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Cobalt ores, typically obtained as a by-product of copper and nickel mining operations, are primarily processed into cobalt hydroxide for further upgrading into high-purity cobalt sulfate suitable for EV batteries, with the bulk of cobalt hydroxide volumes being traded from DRC to China. Ethical concerns about cobalt mining in DRC are however leading to a gradual shift to cobalt intermediate products from laterite nickel ores, which may then also be upgraded into battery-grade cobalt sulfate using a high-pressure acid leach (HPAL) process to produce mixed hydroxide precipitate (MHP) or mixed sulfide precipitate (MSP) intermediates. In general, the nickel and cobalt yield of MHP is higher than that of MSP, containing up to 55% nickel and 4.5% cobalt content respectively, although current applications suggest an average cobalt content of 2% in MHP intermediates.
In 2022, global battery-grade cobalt production grew by 8% year-on-year, and is projected to increase by a further 11.1% in the full-year projection for 2023. China currently accounts for over 73% of global cobalt sulfate supply, with Zhejiang-based Huayou Cobalt alone absorbing over a third of global production. As Chinese investments gradually flow towards other markets, Chinese-owned cobalt sulfate domestic and overseas refineries produce almost 79% of total volumes. However, significant growth is projected in other markets, particularly Asia Pacific and Northern Africa, altogether resulting in the moderate loss of 3.5 percentage points in the market share of China-owned production – with investment in domestic capabilities driven primarily by GEM.
Overall, despite the growth of cobalt sulfate production elsewhere, the global market remains strongly dependent on China, with only a handful of new players penetrating the market. Analysis shows that current market leaders remain dominant in the medium term, with new entrants reaching a marginal market share of less than 4% by the end of the decade. While the competitive landscape remains unchanged however, the surge in cobalt demand worldwide also reflects changing trends in feedstocks used for battery-grade cobalt sulfate production, with cobalt hydroxide remaining dominant, though showing a much slower growth than MHP/MSP intermediate products, which register a CAGR of 32.7% over the forecast period in cobalt content. As a result, MHP/MSP feedstocks could potentially feed about 10% of global battery-grade cobalt sulfate production by 2030. In terms of total cobalt feedstock being deployed for battery cathode material, Stratas Advisors expects battery-grade cobalt production to grow to almost half of global supply of cobalt by 2030.
This report is part of a series covering all segments of the EV supply chain, and contains strategic insights on growth projections and production trends across major markets and 25+ players, outlining key investments which help shape estimates on annual supply through 2030.
- Global supply of battery-grade cobalt sulfate grows at a CAGR of 10.4% from 2022 to 2030, absorbing half of global supply of cobalt feedstock by the end of the decade
- Huayou Cobalt remains the leading cobalt sulfate refiner through 2030, although GEM registers the strongest relative volume growth
- Investments in HPAL plants reflect a tendency to increasingly replace cobalt hydroxide feedstocks for cobalt and nickel intermediate products in the form of mixed hydroxide precipitate (MHP) or mixed sulfate precipitate (MSP), projected to account for over 10% of the feedstock used to produce battery-grade cobalt sulfate by 2030
- New entrants see a very low penetration in the midstream cobalt market, with Chinese assets supplying over 75% of cobalt sulfate by 2030 despite growth in Australia, North America, and Europe
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