• Source: Economist: 24 Mar 18 "Goblin metals"         

    cobalt rushNote on the article title: cobalt derives from the Germanic "kobold" meaning a type of goblin. A similar story for "nickel". EV (electric vehicle) btteries typically require about 10 kilograms of cobalt. More than half the world's cobalt reserves are in the war-torn and chaotic country, the Democratic Republic of Congo.In 2017, 9,000 tons of cobalt were mined for EV batteries. That amount could increase to 107,000 tons by 2026.

    The company Glencore does most of the mining in Congo and currently, Chinese companies control one-third of Glencore's output. China is in position to control 95% (!) of the world's cobalt chemical market.

    EV batteries can be based on nickel-manganese-cobalt (NMC) or based on nickel-cobalt-aluminum (NCA). Reduce the amount of cobalt in either and bad things can happen (overheating, fires or short charge life).

    Nickel has not had anything like cobalt’s price rise. Nor do the Chinese appear to covet it. Oliver Ramsbottom of McKinsey, a consultancy, says the reason for this relative indifference dates back to the commodities supercycle in 2000-12, when Indonesia and the Philippines ramped up production of class-2 nickel—in particular nickel pig iron, a lower-cost ingredient of stainless steel—until the bubble burst. The subsequent excess capacity and stock build-up caused nickel prices to plummet from $29,000 a tonne in 2011 to below $10,000 a tonne last year. As yet, the demand for high-quality nickel suitable for EVs has not boosted production. Output of Class-1 nickel for EVs was only 35,000 tonnes last year, out of total nickel production of 2.1m tonnes. But by 2025 McKinsey expects EV-related nickel demand to rise 16-fold to 550,000 tonnes.

    In theory, the best way to ensure sufficient supplies of both nickel and cobalt would be for prices to rise enough to make mining them together more profitable. But that would mean more expensive batteries, and thus electric vehicles. Only a goblin would relish such a conundrum.

  • Source: "Congo: match in a tinderbox"         

    Congo timeline: ruled (as Zaire) by dictator Mobuto Sese Seko from 1965 to 1997 until overthrown by Rwandan-backed rebels who installed Kabila as new ruler. Country and region dealt with civil war post-1997. Congo has stabilized under the son of Kabila, Joseph. But his term of office expired 6 months ago. Why have there been no elections? In the Kasai province in central Congo, a running conflict has been going on since August ’16 against a tribal militia called the Kamuina Nsapu (the “Black Ants). This civil war is preventing elections and keeping Kabila in power. Kasai is also the traditional home of the Congolese opposition - Le Rassemblement. They think Kabila has engineered the Black Ant conflict to have an excuse to stay in power long enough to change the constitution and remove his term limits.

    The Congolese economy is dependent upon copper, cobalt and diamonds. Both copper and cobalt have had price declines. The central bank has resorted to printing more francs to pay the bills given the copper and cobalt revenue declines and the franc has lost half its value since November 2016. Seko-era corruption and the civil war have resulted in a poor infrastructure meaning that Congo must import almost everything,including food.