How the global cobalt market works, and why Australia's battery ambitions depend on it

Cobalt is invisible to most Australians, but it sits at the heart of the global energy transition. This silvery-grey metal is essential to lithium-ion batteries that power electric vehicles, store solar and wind energy, and keep mobile phones running. Without cobalt, the world cannot transition away from fossil fuels at the speed it needs to. Yet cobalt mining is concentrated in one country, its supply is volatile, and Australia has almost none of it. That mismatch shapes everything from the cost of an EV to your electricity bills in a renewable future.

Why cobalt matters so much

Cobalt plays a specific chemical role in lithium-ion batteries. It stabilises the cathode, the positive terminal that stores and releases energy. A typical EV battery contains between 8 and 20 kilograms of cobalt. A renewable energy storage system can contain hundreds of kilograms. As the world electrifies transport and grid-scale battery storage expands, global cobalt demand is forecast to triple or quadruple by 2040. There is no simple substitute yet. Researchers are working on cobalt-free batteries, but they remain more expensive and less energy-dense. For the next decade at least, cobalt is irreplaceable.

The Democratic Republic of Congo problem

The Democratic Republic of the Congo mines roughly 70 per cent of the world's cobalt. This concentration of supply in a single developing nation creates structural risk. Political instability, supply shocks, and price spikes ripple across global battery manufacturers. China, which refines 65 per cent of the world's cobalt, uses this geography to its advantage. Chinese companies have invested heavily in DRC mining operations and processing capacity, securing long-term supply contracts that lock in prices and exclude Western competitors. When cobalt prices spike, battery makers worldwide feel it. When DRC output falls due to unrest or regulation, global battery production slows.

The recycling race and the sourcing dilemma

As EV and battery recycling matures, recovered cobalt will eventually meet 25 to 30 per cent of global demand. But that infrastructure is still nascent. Recycling plants are concentrated in Europe and China. A used EV battery takes five to ten years to reach recycling age. Until then, primary mining will dominate supply. Australia produces cobalt only as a byproduct of nickel mining, in small quantities. Western nations are pushing to diversify sourcing away from the DRC, but no single alternative exists. Indonesia, Russia, and Papua New Guinea have reserves, but they lack the mining scale or investment. Cobalt sourcing remains a strategic vulnerability for any nation pursuing battery independence.

What it means for Australia

Australia is pursuing an ambitious clean energy and EV manufacturing agenda, but it is hostage to cobalt imports. If Australia wants to build its own battery industry or manufacture EVs domestically, it will compete with China, South Korea, and the United States for cobalt supply from a limited pool. This means higher feedstock costs and longer lead times. Alternatively, Australia can accelerate cobalt recovery from recycled batteries and invest in extraction technology from laterite ores, which are less efficient but geographically distributed. Some Australian nickel miners are exploring cobalt by-product recovery. Investment in battery chemistry research that reduces cobalt intensity also matters. But none of these paths is quick. In the near term, Australia's battery and EV ambitions will remain dependent on global cobalt markets shaped by African geology and Chinese processing power.

The bottom line

Cobalt is a chokepoint metal in the global energy transition. Its supply is concentrated, its price is volatile, and alternatives are not yet mature. Australia, despite its mineral wealth, has little cobalt and no processing capacity. As battery demand accelerates, cobalt will remain a constraint on how fast Australia can electrify its economy and build domestic battery manufacturing. The world is aware of this risk, but solving it requires not just mining investment but also recycling infrastructure, battery chemistry innovation, and geopolitical diversification. None of that happens overnight.

This article was compiled by AI and screened before publishing. See our editorial standards.