The cobalt and lithium global supply chains: status, risks and recommendations

Battery technology has emerged as a crucial element in realizing the clean energy transition and reducing the energy sector's dependence on fossil fuels. Governments worldwide are recognizing the importance of energy storage and are investing significant sums in relevant industries to enable the widespread adoption of renewable energy sources and reduce greenhouse gas emissions. However, implementation of complete decarbonization in all sectors presents a challenge that will likely boost the demand for batteries dramatically in the short term. This could result in shortages of some battery materials in the coming years, particularly cobalt and lithium, which are two critical components used in lithium-ion batteries (LIB), the most widely used type of batteries in electric vehicles and energy storage systems.

This report analyses the risk assessment of cobalt and lithium, using the Materials Flow Analysis (MFA) method in 2019 as this is the latest year with available data not affected by the COVID-19 pandemic. The entire value chains of both cobalt and lithium, from mineral exploration to waste management at the global level, are taken into consideration. Further, multiple scenarios for the supply and demand of cobalt and lithium in year 2030 are also collected from various sources to predict the risk for supply distortions with time. Finally, this report evaluates the progress of emerging battery technologies and their potential to compete with LIB technology.

The results of this report show that many new advanced battery technologies are under development worldwide, such as solid-state batteries, sodium-ion batteries, lithium-sulphur batteries, lithium-air batteries. However, none of these technologies are expected to be adopted by the market at an important scale before 2030. Lithium-ion batteries will still be the dominant technology in use during the next decade. Lithium as a crucial constituent cannot be substituted by 2030, whereas cathode materials with less or no cobalt are expected to be the new tendency.