When 176 parties around the world signed the Paris Agreement on climate change in Paris in 2016, the transformation of car electrification has become an irreversible trend.

Global sales of battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV) reached 3.24 million in 2020, up 43 per cent from 2.26 million in 2019, according to data compiled by EVvolumes.com.

Next, sales will grow rapidly. According to the analysis of the International Energy Agency (IEA), according to the SDS scenario (that is, achieving the goal of the Paris Agreement), the global stock of electric vehicles will reach 230 million in 2030, accounting for 12% of the total number of road vehicles. The analysis also points out thatOn average, a traditional car needs about 33 kilograms of new raw materials, while an electric car needs more than 200 kilograms, six times that of a traditional car.

From the wind of the times to the sales of electric cars and the growth of new raw materials, all point to the fact that demand for metal ore production will continue to rise in the future.

It is understood that the power battery is the most critical component in the manufacturing process of new energy vehicles, and the demand for metal minerals is also the highest. The raw materials of power battery mainly include positive and negative electrode material, electrolyte, electrode substrate, isolation film, tank material and so on.

Among them, cobalt, nickel, lithium, manganese and other metal minerals, as important raw materials in the battery manufacturing process, occupy an important position in the fierce competition of new cars now and in the future.

Because at first China was betting on electric cars and greatly increased the popularity of electric cars through subsidies. At present, China's influence covers almost every component of the power battery.According to Benchmark Mineral Intelligence, China accounts for more than 60% of the global market for refined processing of lithium, cobalt and other raw materials.

However, as the United States and Europe vigorously promote the electric vehicle industry, a "secret war" for metal raw materials is under way. It is understood that Biden proposed that car and battery companies should be produced in the United States, but also to increase technological research and development to catch up with China. In Europe, it has also increased investment in the battery field and is building a number of battery factories.

The battle for cobalt

Among many new energy materials, cobalt is an important guarantee for the stability and safety of batteries, but it is also the lowest reserve and the highest price among several metals. In 2019, the world's proven cobalt reserves are about 7 million tons. By comparison, global lithium reserves in 2019 are 17 million tons and nickel reserves are 89 million tons. This also makes it the bottleneck of ternary lithium battery.

At the same time, the industrial chain around cobalt shows a highly centralized trend. At present,Congo（金）The total output of Cuba, Australia and Cuba accounts for about 75% of the world's total cobalt ore production, of which only Congo（金）It accounts for 70% of total output and occupies a dominant position in the supply chain; China accounts for about 67% of the global cobalt mining industry; and the top 10 cobalt mining companies in the world dominate 75% of total cobalt production.Switzerland-based Glencore accounts for about 30 per cent, while four Chinese companies (China Molybdenum, Jinchuan Group, Huayou Cobalt and China Zhongzhi) are in the top 10.

At the same time, downstream enterprises compete to bind with upstream enterprises in order to ensure the supply of cobalt. In March this year, Glencore, the world's largest cobalt mining company, announced that Glencore had pledged to supply no less than 137800 tons of cobalt resources to Glencore over the next 10 years, and it was revealed that Tesla, Inc. planned to sign a cobalt procurement agreement with Glencore in June 2020. supply up to 6000 tons of cobalt per year.

In addition to enterprises, the government has also begun to enter the Bureau. The Democratic Republic of the Congo (DRC), which accounts for more than 50 per cent of the global market in reserves and 70 per cent in production, established a state-owned cobalt industry company (EGC) in 2019 and officially listed on March 31, 2021. EGC will integrate the entire industrial chain of procurement, processing, sales and export of manual cobalt mining in its territory, and will eventually have the pricing power of cobalt. In other words, EGC will have a monopoly in the cobalt industry.

The head of EGC said in an interview with the media: "it is hoped that the company's share of the cobalt market is large enough to influence the price of cobalt as Saudi Aramco affects international oil prices, and ultimately increase the profits earned by the country." We believe that EGC will establish the image and position of Congo in the cobalt market. "

Attitudes towards the metal cobalt, whether battery makers or carmakers, are ambivalent.

On the one hand, the cost of using cobalt is too high. At present, the main reason for the high cost of ternary positive battery, which occupies the main position in the battery market, is its high demand for cobalt.The price of cobalt is about three times that of nickel and 50 times that of manganese.In 2020, Musk said, "if you maximize the use of nickel and reduce the use of cobalt to zero, you can reduce costs by 50%." "

In addition to the high price, the volatility of cobalt price is also a headache for the industry. In the first quarter of 2021, the price of cobalt reached 345000 yuan / ton, an increase of 26% over the same period last year and 28% month-on-month. The performance did not stabilize until it entered the off-season of sales in the second quarter. In 2018, cobalt prices soared to a high of 680000 yuan per ton.

On the other hand, cobalt is a technical factor that can not be bypassed by energy batteries in the short term. Although Ningde era, Tesla, Inc., Honeycomb Energy and other enterprises have quietly promoted the battery "de-cobalt", but it is still in its infancy and has not become the mainstream technology route.

This also means that the battle over cobalt will gradually turn white-hot.

The next oil?

Besides cobalt, nickel and lithium are also very important new raw materials for the new energy industry.

At present, the global lithium resources are mainly concentrated in the "three lakes and seven mines" in South America and Australia. Among them, the exploitation of salt lake is relatively easy and the cost is relatively low. The salt lakes currently in production are mainly located at the junction of Chile, Argentina and Bolivia in South America, known as the "lithium triangle", including the three major salt lakes (Atacama, Hombre Muerto and Olaroz), as well as two salt lakes under development, Caui and Vida.

In terms of global supply,Australia, Chile, China and Argentina accounted for 96 per cent of global lithium production in 2019, while the mid-stream supply chain was mainly in China. It is understood that 60% of the world's lithium products and 80% of the world's lithium hydroxide products are made in China.

As for the enterprise level, more than 90 per cent of the global production capacity of lithium products is concentrated in China's Tianqi Lithium Industry, Chile's Mining and Chemical Industry (SQM), Yabao, Food Machinery and Australia's Orocobre.

As the value of lithium resources is gradually discovered, countries regard it as a strategic resource. Recently, US President Joe Biden has actively promoted the $174 billion "Electric vehicle support Program". In the first quarter of this year alone, Nevada lithium miners raised nearly $3.5 billion to invest in lithium mining and lithiation products, Bloomberg News reported.

Japan's Softbank Corp. Group also invested about 8 billion yen in April 2018 to acquire a 9.9% stake in Canada's Neimaska Lithium Industry. At the same time, auto giants such as BMW, Toyota and Tesla, Inc. have laid out upstream lithium resources one after another.

In addition, the producing countries of global companies are also actively seeking change. Chile, for example, expects to be not only an exporter of resources, but also a player in battery production. SQM, Chile's largest lithium miner, has announced that it will sell it at a discount to buyers who can bring battery technology. But power batteries need a matching supply chain and a lot of stable demand, which is exactly what Chile lacks at the moment.

Another raw material that can not be ignored is nickel. Although reserves are relatively high and prices are relatively stable, nickel rose to a six-year high of US $19700 per ton in late February due to the surge in demand.

Demand for nickel in electric vehicles is expected to exceed 890000 tons by 2030, with a radical estimate of 1.7 million tons, according to Brazilian mining giant Vale SA. This means that the demand for nickel in the field of new energy vehicles will increase by 8-16 times in the next decade.

In the face of huge demand, the shortage of nickel supply worries companies. Musk, who frequently shouted "high nickel and low cobalt", has repeatedly called for more nickel mining, and he even said that "nickel is the biggest bottleneck for us (Tesla, Inc.)."

It can be seen that the tight supply and demand of metal minerals is affecting the development of the industry as a whole. Without sufficient and high-quality metal mines and stable supply chain, the stability of new energy vehicle production, consumers' willingness to buy and investors' willingness to invest can not be guaranteed. Small fluctuations in prices may lead to a big increase in the risk of the industry.

This makes it easy for us to think of oil resources that are strategically important in the traditional industrial era. Oil, known as the "blood of industry", plays an important role in the past and present global economic and political pattern. The International Monetary Fund estimates that every $5 increase in oil prices will reduce global economic growth by about 0.3 percentage points.

Although oil is still the most important energy resource in the world today, the global consensus shown in the Paris Agreement predicts that the transformation of new energy has become an irreversible trend. At some point in the future, new energy will replace oil-based traditional energy, in which the transformation of automobile electrification will play an important role.

As the head of EGC, the state-owned cobalt mining company in the Democratic Republic of the Congo, said, he hopes the company will become the "Saudi Aramco" of the cobalt mining industry. In the face of the current supply and demand of metal minerals and the current situation of the industrial chain, can we predict that the next "oil" will appear in cobalt, nickel and lithium?