The lack of critical battery minerals like nickel and cobalt significantly disrupts the supply chain for electric vehicle (EV) batteries and other clean energy technologies in several key ways:
Impact on Supply Chain Stability and Reliability
- These minerals are geographically concentrated in a few countries, which makes the supply chains fragile and vulnerable to geopolitical risks and trade disruptions. For example, cobalt is largely mined as a byproduct in the Democratic Republic of the Congo, and nickel deposits are found in specific regions. This geographic concentration raises concerns about supply stability.
- Processing of critical minerals is even more concentrated, especially in China, which dominates the refining of lithium, cobalt, and nickel. For instance, China refined about 65% of the global lithium supply and 74% of cobalt in recent years. This creates a bottleneck and increases the risk of supply interruptions and market power imbalances.
Effects on Battery Manufacturing Costs and Complexity
- The complex, global nature of the battery supply chain means materials travel thousands of miles before becoming part of the final product. Disruptions or shortages in critical minerals like nickel and cobalt increase logistical challenges, add to costs, and raise the carbon footprint of battery production.
- Shortages force battery manufacturers to seek alternative chemistries or use lower amounts of these minerals, which can affect battery performance, energy density, and longevity.
Economic and Strategic Consequences
- Insufficient supply of nickel and cobalt constrains the growth of the EV industry and the broader clean energy transition by limiting battery availability and increasing costs.
- This scarcity incentivizes investment in recycling technologies that recover over 95% of critical minerals from used batteries, aiming to reduce dependence on primary mining.
- Countries like the U.S. are seeking to develop domestic mining and processing capabilities to reduce reliance on foreign sources and supply chain risks.
In summary, the lack of critical battery minerals like nickel and cobalt leads to supply chain vulnerability, increased costs, and potential slowdowns in the adoption of battery-dependent clean technologies. It underscores the need for diversified mining sources, enhanced processing capabilities outside of dominant countries, and improved recycling systems to secure these essential materials.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-does-the-lack-of-critical-battery-minerals-like-nickel-and-cobalt-affect-the-supply-chain/
