Cobalt critical to electrifying road traffic
March 13, 2018
Ladies and gentlemen,
Cobalt has been used in computer processors and mobile phones for years. Billions of people now own smartphones, giving the material an enduring source of demand. However, this is not what makes cobalt so exciting. There is a more significant driver that will see demand for cobalt soar.
This is the electric vehicle (EV).
Large quantities of cobalt are needed for the batteries that power these cars. This has led to the price of cobalt tripling over the last 18 months.
Fierce competition among auto makers has already begun
Volkswagen – the world’s largest car manufacturer – has secured USD 25 billion in battery supplies. It’s a bold move that could see Volkswagen win a commanding share of the electric vehicle market. They have now announced plans to build 16 electric-vehicle factories by 2022 and they also plan to produce three million electric vehicles a year by 2025.
More incredibly, BMW, Mercedes-Benz and Jaguar stated recently at the Frankfurt Auto Show that every model they manufacture will have an electric model equivalent by 2025.
Pressure on governments to electrify vehicle traffic
Many governments need to cut emissions, especially now they are signatories of the Paris Agreement.
Among these, China is probably the most significant. Its cities are some of the worst polluted globally. It’s also the world’s largest CO2 emitter. Plus, it has the biggest car market in the world. The country has a lot to lose economically if it doesn’t clean up.
Chinese firm BYD, which is part owned by Warren Buffett, has taken on the governments challenge. It plans to dominate China’s electric vehicle market with a revenue target of US$150 billion in sales by 2025.
It has already halted the production on 500 cars this year because they failed to meet its strict emission standards. What is more incredible, however, is that government plans to put a timetable in place that will completely electrify all vehicle traffic.
Demand for cobalt, which is critical to electric vehicles, could soon outstrip supply. Blackstone Resources is well positioned to benefit from this trend with a significant holding in First Cobalt – the largest cobalt exploration company in North America today.
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