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First Cobalt stresses cobalt role in batteries after Tesla elimination plan

Highlights

Tesla plans to produce cobalt-free, nickel-heavy cathodes in-house

First Cobalt expect cobalt's importance to continue

Developing North American battery ecosystem of critical importance

London — First Cobalt has emphasized the importance of cobalt in nickel-rich batteries, despite an announcement at the Tesla Battery Day that the electric vehicle maker plans to eliminate cobalt in its cathodes.

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Tesla CEO Elon Musk said Sept. 22 that the automaker planned to make electric vehicle batteries with cobalt-free, nickel-heavy cathodes in-house, which would make its EVs more affordable.

"It's absolutely critical that we make cars that people can actually afford. Affordability is key to how we scale," he told the Battery Day audience.

Musk added that nickel availability was important to scaling up battery manufacturing and urged miners to mine more nickel.

"In order to scale, we need to ensure we are not constrained by total nickel availability," he said.

Tesla Powertrain and Energy Engineering division senior vice-president Drew Baglino added that nickel was the "cheapest and the highest energy density metal," making it a goal to increase nickel content and eliminate cobalt.

S&P Global's Managing Director and Global Head of ESG Research & Data, Manjit Jus, said in reaction: "It was surprising to hear that Tesla made a commitment (if not time bound) to phase out cobalt from its batteries. From a social impact perspective, this is quite significant given the human rights issues around cobalt in the supply chain. Of course, from an ESG perspective, a more firm commitment to when this will happen would have been welcomed (not to mention the fact that it will bring down the price of batteries)."

First Cobalt doubts success

First Cobalt pointed out that the move to try and go cobalt-free had been ongoing for years, with limited success.

"Despite years of trying to remove cobalt from batteries, it has proven to be a formidable challenge owing to its importance in keeping batteries safe and extending the life of cells," it said.

Due to these challenges, First Cobalt pointed out that battery manufacturers had rather opted to lower the amount of cobalt in a cell to decrease the cost while preserving the integrity of the battery.

"This is the battery evolution trend almost all market experts are predicting, with the nickel-cobalt-manganese (NCM) cathode remaining the dominant chemistry," it said, adding that most other EV makers were developing their electrification plans on the basis of NCM battery technologies.

"We remain steadfast in our belief that cobalt will continue to be an essential component in nickel-rich batteries. The timeline from concept to commercialization of any new battery technology will take ten or more years," the miner added.

It also pointed out that Tesla had previously concluded a long-term cobalt supply deal, which would be at odds with its Battery Day announcement.

This referred to news from the Financial Times in June that Tesla had signed a deal with miner Glencore to supply cobalt from the Democratic Republic of Congo to its gigafactories in Shanghai and Berlin.

"Cobalt will continue to play an essential role in long-range vehicles, keeping cars safe and prolonging battery life. Contrary to speculation, cobalt will not be taken out of the battery anytime soon," it said.

However, it added that the evolution of battery technology toward lower cobalt content was positive from the perspective of EV penetration rates and for cobalt as a critical input. Cobalt remains the scarcest battery raw material input and the most expensive commodity, meaning that lower amounts in battery cells would lead to higher penetration rates, which in turn would drive adoption rates.

North American supply chain

First Cobalt, which owns the only permitted cobalt refinery in North America, unsurprisingly did agree with Tesla's aim to develop shorter supply chains and focus on a North American battery solution.

"First Cobalt agrees that developing a North American battery ecosystem is of critical importance, notably in relation to lowering logistics costs, mitigating supply chain disruptions and reducing overall carbon emissions from the supply chain," it said.

It added that the continent was completely reliant on foreign sources of cobalt for its automotive industry and said it was the only company in a position to change that in the short-term.

"First Cobalt is committed to developing a regional battery materials supply chain, initially by recommissioning and expanding its permitted cobalt refinery in Canada to provide battery grade cobalt for the North American and European EV markets," the company said.

It added that it was progressing discussions with several EV manufacturers and over time, it aimed to expand the refinery to recycle black mass from lithium-ion batteries.