Cobalt is critical for modern batteries, but with over half of global production coming from the Democratic Republic of Congo, it represents one of the great geopolitical vulnerabilities.
China controls most of the Cobalt mining in the Congo through coercive labor systems, so if China’s system continues on its current path…Cobalt production will crash. Filling China’s shoes in Congo is no easy feat. Foreign stabilization and oversight are difficult and aren’t likely to come from Western governments. So, Cobalt supplies will collapse.
Either the world will find a way forward with less Cobalt, or we’ll get really good at recycling it. The scariest piece is that Cobalt isn’t the only critical material that’s vulnerable, so the era of easy tech advancement powered by cheap, abundant inputs is coming to an end.
Hey everybody. Peter Zeihan here comes from the Caribbean. Sorry about the sound quality. It’s a little breezy here. Today we’re taking a question from the Patreon page. Specifically, what do I think the future is going to be for cobalt? Out of Congo? Cobalt is a critical material that is used in batteries, primarily cell phones, things like that.
And it’s really the only battery chemistry we have that has a decent, weight and size, ratio that allows it to be mass used. If you use lithium by itself, it’s not nearly as effective. It degrades a lot faster. You really do need the cobalt in order to stabilize the system. The problem is it really only comes from one place.
Over half of the world’s production comes from the Democratic Republic of Congo. And the Chinese basically run it like a slave state. That actually makes the Belgian Imperials of old, blush. How it works is the Congolese basically go and dig out all the ore by hand, and the Chinese control the camps, they control the feed thrus, and they basically buy everything up at pennies on the dollar and then ship it abroad for processing back home.
And so the Chinese control that entire network. You have about 5 to 10% from other places like Canada and the Philippines. little bit from the United States. But the real bulk, if we want to do anything with batteries, especially if your goal is to electrify anything, you have to have this one thing, and it really only comes from one place.
So, what happens to China? Because we are nearing the point in a few years where the Chinese system is going to collapse for demographic reasons. That assumes there’s not a war, that’s assumes there’s not a trade war, all of which could bring the end date faster. What happens to the structure? Because it’s something that most countries in the world just find morally repugnant. It’s modern day slavery, enforced with a gun. Well, it’s not going to be a pretty picture. Part of the problem is the nature of the Democratic Republic of Congo itself. Part of the issue here is that Congo doesn’t really have a functional port.
Congo River is only navigable a few miles from the coast. Can Sasha, the capital, is near that head of navigation. But it has the capacity to handle large ships. So for a foreign force to come here and stabilize it, you basically have to come in skiff in and take over a city of a few million people. Can Sasha, and then somehow project power over a zone where there’s no navigable river, no real roads, largely by air, into a zone several hundred miles inland?
That is hot jungle. And to be perfectly blunt, white people don’t do well in that sort of environment. The reason the Chinese do well is because they’ve cut a series of deal with all the warlords, whether they’re the former warlords who run the government or the ones who happen to be local. And they are really how shall I say this?
Morally uncaring about the details in a post Chinese collapse scenario, it’s difficult to see a government in Europe or North America jumping into that role. So we would probably be talking about some sort of, arm’s length management system where you partner with consortia and you basically let them do the atrocities. That allows a degree of structure to be imposed.
It’d be very, very, very, very, very ugly. More likely, we’re just not going to get nearly as much cobalt as we need. And that’s going to change the technological curve of where where you’re going. So if you’re into computers or cell phones or green tech, you have to re fabricate your products with significantly less cobalt and or redesign your products so that the cobalt at the end of the day is recyclable and you can break the system down and reuse it.
One of those two options is pretty much how we have to go, because we’re not going to have the flows that we’re going to need. About the only good news here I have is that there aren’t a lot of materials in the world that hit that category, specifically micro materials that are critical. Unfortunately, one of the other ones is something called tantalum, which is used for similar purposes, which also is in Congo and is produced in almost exactly the same matter.
So we’re going to lose a couple of things that are very important here. The third one is tungsten. And that primarily comes out of the Chinese border region of what, in the state of Myanmar. That’ll probably be a little bit better. Myanmar is been in and out of civil war now for these 50 years, almost.
And the Chinese run war, well, they run the mines in WA more or less the same way that they do in Congo. But in a post Chinese environment, you’re probably going to have a stronger central government in Myanmar, whether or not you like what that looks like, it does suggest that there is a path for the tungsten to still come to the market, and there’s not nearly the market concentration for tungsten in Myanmar that there is for tantalum and cobalt in Congo, where it’s over half of the global total, tungsten is a little bit more varied.
So so bottom line is that for a number of materials, including these three, we’re going to have to learn how to get by with less. Maybe that’s recycling. Maybe that’s if we get lucky new sources. But more likely the business as usual of tech advancement that we’ve become used to is simply not going to fly, and we’re going to have to get by with less.
