24 February 2022

Cobalt and the American Supply Chains

As a result of the COVID-19 pandemic and geopolitical issues, there has been a trend towards countries across the world seeking resilient, diverse, and secure supply chains.

With this in mind, the U.S. government has undertaken an assessment of its supply chains, with a focus on the role of cobalt in supporting the development of clean energy technologies.

Following the publication of an Executive Order by President Biden directing the U.S. government to undertake a comprehensive review of America’s critical supply chain last year, several U.S. federal executive departments have published reports highlighting the further possible opportunities resulting in a further improvement stronger resilient supply chains across the sectors. Of these, the most relevant for cobalt was the view of the Department of Energy combined with the view of the Department of Defence as their coordinate on the critical mineral aspects.

With increasing demand for clean energy technologies worldwide, the Department of Energy proposes to raise the domestic raw materials availability by inter alia reviewing the federal mining laws and expanding programs for clean energy materials (recycled sources). The report also underlines the need of a reliable international supply chain, alongside promoting the adoption and implementation of traceability standards to improve global supply chain mapping capabilities.

In particular, the battery supply chain will be supported thought the Department of Energy’s planned investment of nearly $7 billion in funds from the Bipartisan Infrastructure Law (BIL), with the aim of strengthening the end-to-end U.S. battery supply chain. This includes the areas of the material refining and production, battery cell and pack manufacturing, and recycling.

Although the Department of Energy values the importance of cobalt for the green transition and the batteries sector, it also sees the sourcing and use of cobalt as a risk due to the high dependence on China and the DRC. Thus, the department calls it a “material of concern”.

Overall, the U.S. government seeks to further strengthen the raw materials supply chains both domestically and globally. These new actions come with possible investment opportunities and due diligence requirements for the raw materials sector. The Cobalt Institute is engaging with U.S. government officials to identify further opportunities for collaboration.

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