Shortages Endanger the Economy Cobalt is the Riskiest Commodity

Ein Werk zur Lithiumgewinnung in Argentinien zu sehen.
A lithium production plant in Argentina.

Cobalt is the raw material with the highest supply risk, as we heard at the vbw congress on raw material supply.

Electromobility in particular depends on a secure supply of raw materials. "To this end, the supply of lithium, cobalt and rare earths in particular must be guaranteed. For the year 2026, worldwide demand for lithium-ion batteries is expected to be 14 to 24 times higher than in 2016," explained vbw Managing Director Bertram Brossardt with regard to the fact that the Free State of Bavaria is planning its own research and production sites for battery cells in Bavaria.

The secure supply of sufficient quantities overall is a central element in securing the future of many sectors - including the energy turnaround and digital transformation - and is of great relevance, as he stressed at the vbw congress "Securing the long-term supply of raw materials": "Bottlenecks can paralyse entire value chains and endanger our competitiveness.

Basically, securing raw materials is first and foremost the task of each individual company. This is achieved through research and development, long-term supply contracts, substitution and recycling. However, operational possibilities are reaching their limits.

"The greatest risks in the supply of raw materials include rising global demand, protectionism and other negative political developments in the mining regions, as well as increasing concentration among raw material suppliers," said Brossardt.

This is a political issue: international commodity markets must be preserved and new ones opened up. Companies need better support in developing raw materials abroad. Basic research in the field of raw material substitution must be promoted more strongly. "We must also make better use of domestic raw material deposits and it makes sense and is right that the Free State of Bavaria has a raw material strategy. It must be clear to all of us that raw materials are essential for the competitiveness of our economy."