Between a Refined Rock and a Hard Surface
June 5, 2020
How Canada is positioned to benefit from a dedicated supply of cobalt for the electric vehicle market
As the world adapts to the impact of climate change, tremendous opportunities are available for long-term investors to participate in the next industrial revolution. Electric vehicles (EVs) are part of our daily lives in ways they weren’t just a few years ago, and consumers are becoming increasingly conscious of the impact their daily activities have on the planet.
In 2019, over 2 million electric vehicles were sold globally. By 2025, Bloomberg forecasts that this will grow by more than 400% to 8.5 million EVs. As consumer trends lean towards increased adoption of electric vehicles, traditional automakers are pivoting to meet the demands as well. Billions of dollars in new investments have already been slated for essential battery plants across North America.
For Canada, we are fortunate to have a unique homegrown contributor to the North American electric vehicle supply chain in First Cobalt.
First Cobalt owns North America’s only permitted cobalt refinery. Cobalt is a critical component in the manufacturing of batteries for electric vehicles, consumer electronics and industrial applications, and is a foundational piece of the next generation of North American vehicles. If North America is going to successfully transition the automotive manufacturing sector towards electric vehicles, it is going to require organizations like ours to provide a steady, reliable and ethical supply of refined cobalt.
Cobalt provides thermal stability and prolonged battery life in lithium-ion batteries. It is thus a critical component in the manufacturing of batteries and is the first step in the electric vehicle supply chain.
In early May, First Cobalt released a feasibility study that demonstrated the path forward to create a Canadian champion in the automotive supply chain. The addition of a domestic cobalt refiner to the supply chain strengthens Canada’s already formidable auto sector and will help attract new investment into the country as shortened supply chains come into focus.
Our refinery in Cobalt, Ontario is located in close proximity to the largest auto manufacturing centres in North America. With permits and building infrastructure already in place, our refinery can be operational as early as 2021, perfectly timed for the increased demand of electric vehicle adoptions.
Once operational, our refinery will be a significant global player, producing 25,000 tonnes of battery-grade cobalt sulfate. This represents 5% of global refined cobalt supply and 100% of North American supply. China dominates the refined cobalt sulfate market, with 80% of global production.
If the COVID-19 crisis has taught us anything, it is that regional supply chains for critical goods such as cobalt are necessary for our national economic and security interests. The recent health crisis further validates the work that the United States government, working with likeminded allies including Canada, is undertaking in the area of critical minerals.
As the adoption of electric vehicles continues, our refinery is also uniquely positioned to create an ecosystem that will allow us to expand our refinery’s capabilities into battery recycling. Creating this type of cradle-to-grave ecosystem is good business and good for the environment.
We are proud of our work to become Canada’s only primary cobalt refiner, and we are excited to be making a positive impact on the environment and the economy - all while delivering local jobs and working closely with communities to ensure there are shared benefits.
The future of the electric vehicle is bright, and with First Cobalt, uniquely Canadian. We are excited to be building a better path forward.
President and CEO