London, 28 February (Argus) — The development of low-cobalt rechargeable batteries is crucial for the widespread adoption of electric vehicles (EV) and energy storage, speakers at the Argus Metals Week conference said today.

European EV manufacturers already require around 25pc of global cobalt capacity for the production of rechargeable batteries. This is expected to rise significantly as the adoption of EVs increases, pushing up prices and reducing availability, projections by the European Commission's European Alternative Fuels Observatory (EAFO) project co-ordinator Bert Witkamp show.

Greater availability of boron and borates could lead to the wider adoption of lithium borate batteries, Canadian mining firm Alix Resources chief executive Christopher Ecclestone said. This would allow battery manufacturers to capitalise on advances in graphene applications.

Cobalt is a crucial cathode component in rechargeable lithium ion batteries. Global reserves of cobalt total around 7.1bn t, with around half of this found in the Democratic Republic of Congo (DRC), the US Geological Survey (USGS) estimates. But controversies around artisanal mining of cobalt material in the DRC have affected supply. Prices for 99.8pc chemical grade cobalt material were assessed at $38.75-39.25/lb in-warehouse Rotterdam on 27 February, their highest since March 2011.

EV adoption is expected to increase globally in the near term. EVs will reach cost parity with conventional fuel vehicles at some point between 2022 and 2026, the EAFO estimates. National targets on banning diesel and gasoline-fuelled cars have already been put in place by Norway, the UK and France, with other countries including China, Denmark, Germany, Spain and Japan publishing targets for EV sales.

This legislative shift has increased carmakers' involvement in EV technology. Sweden's Volvo will halt the development of gasoline engines from 2019, while carmakers including Volkswagen, Toyota and Renault have increased spending on their EV divisions.

A greater number of EVs is likely to impact domestic and civic energy storage, as vehicle batteries are adapted for second-life use in peak shaving or power stabilisation.

Demand for vanadium metal is expected to increase, as scalable vanadium redox batteries become an alternative to lithium-ion modules for domestic power storage.

This analysis was published in Argus Metals International.