I’m reading “The Prize” — The Epic Quest For Oil, Money & Power. It tells how oil became the world’s most sought-after commodity— truly more valuable than money — and reshaped the global economy. Within this global quest for oil dominance and wealth, the subplots are crazy… politicians making backdoor deals, geopolitical rivalries and battles, and entrepreneurs going to the ends of the world to try to strike it rich; places that, at the time, may as well have been on another planet.
Entrepreneurs and oilmen risked being killed, catching a mysterious and incurable disease, and losing every last penny they had (many did).
For oil and wealth, they indeed risked it all.
Today, I see a similar phenomenon taking place — this time, instead of oil, it’s for some of the critical battery metals, namely cobalt and lithium. Many parallels exist between the early 1900s’ oil industry boom and today’s cobalt and lithium rush.
Incredible fortunes have been made in lithium exploration and mining over the last 6 years, and recent months have provided some of the more rapid returns. Politicians are involved and rushing to secure supplies for their own domestic security. The irreplaceable and hard-to-mine cobalt is similar, although the concentration of opportunities for this battery metal primarily lies in a perilous place… a country only China and a few multinational miners seem comfortable operating in…
The desperation to secure cobalt supply for the future of electric vehicle manufacturing is on full display in the Congo — the world’s richest source of cobalt. But, by and large, western companies and countries have turned their back on the DRC, and for a good reason… the country has an atrocious human rights record.
China, on the other hand, is in the DRC full tilt, with Chinese companies (many controlled by state-owned enterprises) hiring private security contractors to protect supplies and workers operating cobalt mines in the DRC.
You see, the DRC controls just over 70% of global cobalt production. Most of that production is sent back to China to be refined and used in manufacturing electric vehicles, an industry China hopes to dominate. Not coincidentally, there is no substitute for cobalt in EVs.
No cobalt supply, no EVS. It’s that simple.
Some of the stuff going on in the DRC will make the hairs on the back of your neck stand up. Child labour, assassinations, and life-threatening working conditions (many children have died working in DRC cobalt mines) are a few of the tragedies in the Congo regarding cobalt production.
Alex and I discuss the cobalt industry and how the world is increasingly desperate for new supply. We delve into China’s growing influence in resource-rich African nations and the burgeoning geopolitical conflict because of this metal. Worth a listen.