This makes it hard for producers to adjust their supply additions and plans, as cobalt is rarely a primary commodity in mining operations. As automakers and battery manufacturers engage in demand-side responses to cobalt risks, the outlook for cobalt consumption has been continually revised down.

In the absence of a favorable business environment that fosters the sustainable production of batteries and electric vehicles, an export ban alone will fail to incentivize a downstream manufacturing industry in the country.Ĭobalt supply tends to have difficulty adjusting to changing market dynamics. Without corresponding local demand for batteries, it becomes difficult to enforce a policy that permits the export of only cells or batteries. Unlike steel, batteries tend to be closer to their end-use markets due to the complexity and high cost of transporting cells. However, it remains to be seen if Indonesia will achieve its goals given the significant difference between the stainless steel and battery sectors. It is already seeing some early progress, with several partnerships and plans for battery manufacturing investments emerging. The country is looking to replicate its policy actions in nickel and cobalt to achieve the same relative success in the lithium-ion battery and electric vehicle supply chain. The government also overhauled its permitting system to streamline the process. Key to Indonesia’s upstream success is its rich nickel resources, restrictions on unprocessed mineral exports and the requirement for miners to set up processing plants in order to access nickel used in the steel industry. Projects such as Lygend’s Obi Island HPAL and Huayou’s joint venture in Morowali, as well as additional capacity from Tsingshan and other nickel matte producers, have come on stream sooner than expected compared to typical time frames, despite some delays. A flood of plans and announcements in recent years is starting to result in material cobalt supply additions in the country. BloombergNEF estimates Indonesia’s share of global mined cobalt will reach 19% by 2030, from 3% in 2022.Ĭobalt from Indonesia is a by-product of nickel production. Indonesia overtook Australia to become the second-largest producer of mined cobalt last year, behind the Democratic Republic of Congo.Īs demand for cobalt increases, propelled by the need for batteries for electric vehicles, the Southeast Asian nation is expected to increase its output and maintain its number two position this decade.

Cobalt price index