Booming demand for batteries powering the world\u2019s shift into electric vehicles is rekindling US cobalt production after at least a 30-year hiatus.<\/p>\n
Australia-based Jervois Global is starting the first US cobalt mine in Idaho on Friday, according to chief executive Bryce Crocker. The mineral sits \u201cat the top of the table\u201d in terms of national security, said Crocker.<\/p>\n
\u201cThere aren\u2019t many new sources of supply, particularly in stable jurisdictions, which is why this mine in the US is very important,\u201d he said. Cobalt hasn\u2019t been produced in the US since at least 1994, according to data from the United States Geological Survey.<\/p>\n
Cobalt is a crucial component in EV batteries and is on the US government\u2019s critical-minerals list. The US sees widespread adoption of electric vehicles as key to its efforts to combat climate change.<\/p>\n
Both California and New York have passed laws that will ban the sale of new gasoline-powered vehicles in the coming decades. As automakers gear up to achieve ambitious electrification goals, it\u2019s causing a shortage of materials needed in batteries and sparked a global rush to secure those supplies.<\/p>\n
The level of urgency among manufacturers to secure supplies \u201cis profoundly different than it was even two or three years ago,\u201d said Crocker in an interview. \u201cIt\u2019s now very elevated in terms of focus at the director and the board level,\u201d he said.<\/p>\n
In July, General Motors Co and Ford Motor Co stepped up efforts to lock in supplies by signing direct deals with producers of battery metals.<\/p>\n
While more than two-thirds of the mined metal comes from the Democratic Republic of Congo, there\u2019s been an increasing shift among manufacturers to source cobalt from outside the African nation due to allegations of corruption, human rights abuses and the use of child labor there.<\/p>\n
The passage of the Inflation Reduction Act also provides incentives for battery materials sourced in the US.<\/p>\n
EVs can qualify for a $7,500 tax credit under President Joe Biden\u2019s climate and tax bill, as long as their batteries contain minerals extracted from or processed in a country with a free trade agreement with the US, and providing part of the components are made or assembled in North America.<\/p>\n
The Idaho mine is expected to produce 2,000 tons of mined cobalt a year, according to Crocker. The concentrated cobalt will then be exported and converted into refined products outside the US before ultimately brought back into the US to serve customers, he added.<\/p>\n
Jervois owns a nickel and cobalt refinery in Brazil and is talking to third parties in countries such as Canada and Australia to convert the mined material. About 80% of global refining is concentrated in China, but capacity is growing elsewhere, including at Finland\u2019s giant Kokkola refinery, which is owned by Jervois.<\/p>\n
Cobalt demand will grow from 127,500 tons in 2022 to 156,000 tons in 2030, as a result of the shift to iron-based batteries by major automakers, according to BloombergNEF.<\/p>\n
Shares of Jervois trading in Sydney capped the best week since May, gaining 15%.<\/p>\n