Yesterday we introduced how Residential Energy Storage being used to balance energy networks would dramatically alter forecasts for global cobalt demand. On the same day, in Washington DC, Simon Moores, Managing Director of Benchmark Mineral Intelligence provided testimony to the US Senate Committee on Energy and Natural Resources that confirmed a 400% increase in global cobalt demand due to the construction of 70 lithium ion battery megafactories.
Testimony confirms at least 219,679 tonnes of Cobalt demand in 2023 from megafactories alone
Below are some excerpts from his remarkable testimony:
“Benchmark Mineral Intelligence is now tracking 70 lithium ion battery megafactories under construction across four continents, 46 of which are based in China with only five currently planned for the US. When I gave my last testimony in October 2017, the global total was at 17.”
“Almost exclusively, these megafactories are being built to make lithium ion battery cells using two chemistries: nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminium (NCA). This means the supply of lithium, cobalt, nickel and manganese to produce the cathode for these cells, alongside graphite to produce battery anodes, needs to rapidly evolve for the 21st century.”
On Chart 2 of his testimony, he provides a chart that lists the demand for cobalt by battery megafactories:
2017: 54,354
2023: 219,679
2028: 276,401
Testimony highlights need for US to construct its own megafactories
Simon Moores mentions in his testimony that only 5 megafactories out of 70 are planned in the US and only 1 exists today. Clearly this not enough to maintain the USA competitive position in these industries. Expect the US to make significant and immediate investments in this area. This was further supported by the stunning show of unity when the entire US Government stood in a standing ovation during the State of the Union when infrastructure spending on industries of the future was mentioned.
Testimony doesn’t factor in additional growth from Grid Network Balancing by Residential Energy Storage
The testimony makes only brief mention of the role Residential Energy Storage plays in the demand driving the construction of these battery megafactories and makes no mention of the demand that grid energy balancing through residential energy storage batteries will create for batteries and the cobalt that goes in them.
Testimony 2023 estimates could be off by 200,000 tonnes or more
Based on the omission of grid energy balancing demand for Residential Energy Storage batteries the estimates for global cobalt demand provided in the testimony is too low. A sign of this is that the testimony only shows demand growth of 50,000 tonnes per year between 2023 and 2028, which would be far too low to account for the massive demand growth that will come from increased energy utility adoption around the world. Also keep in mind that this testimony only covers cobalt demand from battery megafactories and not all the other demand from other sources. With this mind, true 2023 demand estimates could be 419,000 tonnes from megafactories and 650,000 tonnes or more overall! At prices of $100,000 per tonne this would equate to a market worth
Declan Cobalt (CSE:LAN) is uniquely positioned to take advantage of these trends
Where will the cobalt come from to meet these massive changes in cobalt demand? Declan Cobalt has a large mining area in close proximity to European battery megafactories. Its management team includes Wayne Tisdale, CEO, who previously sold a company to US Cobalt for over $100 million and thus has key relationships with USA Cobalt players. Its stock is currently trading at historically low prices and is well-positioned to see massive growth once these trends become recognized by the mainstream!
(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.)