China Quickly Taking Control of Cobalt as it Looks to Advance EV Industry

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【Summary】With only a limited amount of cobalt globally, China is looking to take command control of cobalt mines to ensure the country has a strong foothold on expanding its electric-vehicle industry.

Original Vineeth Joel Patel    Aug 18, 2018 6:00 AM PT
China Quickly Taking Control of Cobalt as it Looks to Advance EV Industry

While electric vehicles are less complicated than traditional gas-powered vehicles, they require a different set of materials to manufacture. As automakers around the world look to make the switch to EVs, supply levels of the necessary elements to manufacture electric cars is already starting to dwindle. 

Earlier this March, Forbes wrote a lengthy piece on an upcoming cobalt shortage, which is a necessary element for making lithium-ion batteries. While the amount of cobalt that is globally available is quickly dwindling, other elements, like lithium and graphite are readily available. 

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Finding Ways Around An Upcoming Shortage

To ensure that they have a steady supply of cobalt, some automakers, like Tesla and Volkswagen, have met up with large producers to stockpile a large amount of the element. Unfortunately, they're not alone, as other companies need cobalt to make things like smartphones and laptops. That means everyone is competing with giants like Apple. 

In addition to be detrimental to companies, a cobalt shortage could also spell disaster for countries. China, which is the leader in electric vehicles, is relying on automakers to sell electrified cars in the country to help reduce the amount of pollution in its air. China is also close to banning gasoline-and diesel-powered cars in the near future. If China doesn't have a lot of cobalt on its hand, it could be a major problem for the country, as it looks to move toward more efficient vehicles. 

According to The Epoch Times, China knows that it's going to need a large amount of cobalt on hand and is looking to get a large supply of the element on hand to ensure that its EV uprising is still possible. The majority of cobalt comes from the Democratic Republic of Congo (DRC) and China has incredible control over the industry. As an unnamed official with Japan's Ministry of Economy, Trade, and Industry told Nikkei, it's as if China "had total control over oil fields in the Middle East."

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How China Gets Its Cobalt

The outlet, citing Nikkei and information from the Japan External Trade Organization, claims that China has provided roughly $9 billion in financial aid to Africa over a two-year span from 2007 to 2009. The form of financial aid is something China has done before and is classified to some as "dollar diplomacy" in which China provides foreign countries with large investments and loans to exert its influence in the region, states The Epoch Times. 

China's "dollar diplomacy" in the DRC can be traced back to November 2017 when the country provided the African region with approximately $6 million in financial aid for emergency humanitarian assistance, claimed China's Ministry of Commerce at the time. After the investment, China gained mining rights to the DRC's copper and more importantly its cobalt deposits. China's connections have stopped other countries from accessing the same cobalt mines. 

"Everything has become Chinese," said Richard Muyej, governor of Lualaba Province in the DRC, at a mining conference earlier this June. 

While having a firm grip on the global cobalt supply would be a good thing for China and its rush to develop electric cars, it could be a disaster for other countries and automakers.  

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