To quote a battery engineer: “For the European auto companies to change over to electric vehicles is like turning a battleship. And it’s a battleship with a mutinous crew.” As the European policy world noticed with this week’s French government surrender on diesel taxes, going green is not that easy. It will become even more difficult as EV production scales up. The problems are not only with public support for decarbonisation charges but with the increased burden on raw material supplies. Attention has already been drawn to how lithium ion batteries require cobalt, the biggest reserves of which are in the Democratic Republic of Congo. The DRC government knows how important cobalt has become, and in the past week has tripled its royalty ch arges on the mineral. The mining companies have protested, of course, but with their huge fixed costs and few alternative sources, they will pay up. The royalty increase, only the latest example of the DRC’s aggressive approach to increasing its take when prices go up, will tend to discourage new investment in large-scale mines in the country. So a significant part of the DRC’s cobalt output will continue to depend on energetic children scrambling around informal “artisanal” mines.
FT 7th Dec 2018 read more »