German Research Funding Is Big Win For Ethical Cobalt
In an announcement last Wednesday the German Government announced it would fund a research facility in the country to develop new technologies for EV (electric vehicle) batteries. The German science minister, Anja Karliczek, said the move was designed to counter market dominance by EV battery producers in Asian countries.
The German science ministry dedicated to investing 500 million euros ($568 million) to encourage private German companies to invest in new and existing EV technologies. Having government support on this scale will reduce the risk on private companies who are interested in beginning production on EV batteries.
Big Win For German Carmakers
The German auto industry is one of the most popular and respected in the world, with approximately 426 billion euros ($486 billion) in total sales in 2017. German cars accounted for 8% of all car sales in the US in the same year and consist of iconic brands like BMW and Mercedes, however their entrance into the EV market has been slow. Mercedes, Audi, and BMW only just announced their electric cars in the fall of 2018 and the reaction was muted. Far from being solid competitors to Tesla, the electric offerings from the major German car brands were seen as “old wine in new bottles.”
This new injection of confidence into the industry on behalf of the German government could be the spark that lights the fire of German electric vehicle production. Karliczek told a business conference in Berlin, “The German car industry shouldn’t depend on Asian suppliers. This is not only a question of independence, but also a question of keeping the German economy competitive.” This most recent announcement by the science ministry is in addition to the 1 billion euros ($1.14 billion) already earmarked by the Economy Minister Peter Altmaier for the large scale production of electric batteries by German companies.
A Mandate For Ethical Cobalt
This news is especially welcome to those in the EV battery industry, who are fighting to create a clean line of responsibility in the production of EV battery cells. As in many high tech industries, the production of electric battery cells has big accountability gaps in the production chain, which can lead to exploitation by unethical actors. There has been a big push in recent years to clean up the ethics of high tech, driven both by not-for-profit groups like Amnesty International. The Chinese government even recently instated the Responsible Cobalt Initiative, which has many major corporate signatories.
Most high tech devices, EV batteries included, require a smorgasbord of rare metals. One of the most controversial is cobalt, a byproduct of nickel and copper, which is an essential component in lithium ion batteries. 60% of the world’s cobalt is mined in the Congo and 20% of that is mined in “artisanal mines” with no ethical oversight. According to Amnesty, which published a blockbuster exposé on the human cost of high tech, artisanal mines are not the hipster locations the name may conjure. Artisanal miners are often farmers who supplement their income by working in the mines during the off season and frequently employ child labour to keep costs down.
Declan Cobalt Is Well Placed To Take Advantage
There are number of mining companies, many in Canada, who are using previously dormant nickel and copper mines to discover new sources of cobalt away from the unethical practices of the Congolese mines. Declan Cobalt, a Canadian mining company, has made big strides in the last year in its Tisova mine, announcing just last week it has discovered highly promising deposits at drill depth.
The recent funding announcement made by the German science ministry is big news for Declan’s ethical cobalt mine at Tisova – the mine is right on the Czech/German border is just over 100 kms from a major BMW production facility. The location of a major source of cobalt so close to the epicentre of German auto production is likely to pay off dividends for Declan, who is uniquely positioned to take advantage of the new influx of interest into the German EV market.
A Major Step Forward
This move by the German government is a major step forward in providing sources of ethical cobalt to the electric vehicle industry which will ripple outward to all corners of the renewable energy market. Remember, it’s not just vehicles that benefit from large-scale rechargeable batteries: personal electronics and home energy storage solutions are just as dependent on lithium ion cell batteries. Finding new sources of ethical cobalt to run these devices will be a major sources of growth in coming years as the market continues to expand.
(Note: In this article we mention Declan Cobalt. Declan Cobalt is a client of TrendScan and members of the TrendScan team own options to stock in Declan Cobalt.)