Driving Demand: Assessing the impacts and opportunities of the electric vehicle revolution on cobalt and lithium raw material production and trade

The report examines the global market for lithium-ion batteries and the critical role of lithium and cobalt. It uses Chile and the Democratic Republic of the Congo (DRC) as case studies to illustrate how developing countries can capture value from the electric vehicle (EV) boom while managing risks such as price volatility, technological shifts toward cobalt-free batteries, and social or environmental degradation. The document argues that while lithium demand remains stable, cobalt faces higher uncertainty, suggesting that producer countries should diversify into mining-related services to avoid stranded assets.

• Global demand for lithium has increased significantly due to the EV industry, rising from 123 kilotons of lithium carbonate equivalent in 2010 to 290 kilotons in 2019, with 65% of the 2019 demand directed toward battery development.
• The lithium market has experienced high volatility, with production increasing threefold between 2015 and 2018, followed by a price decrease of 80% between November 2017 and 2019 due to oversupply and external shocks.
• Chile is a critical global lithium supplier, producing approximately 23% of the world's lithium in 2019 and holding about 50% of known global reserves.
• The Democratic Republic of the Congo (DRC) holds a virtual monopoly on cobalt, accounting for 71% of global production in 2019 and 88% of global cobalt exports.
• Cobalt demand is subject to significant risk from technological shifts, as some manufacturers like Tesla aim to develop cobalt-free batteries to avoid toxicity concerns and high prices.
• The DRC's cobalt sector is characterized by a dual system of industrial large-scale mining (LSM) and artisanal and small-scale mining (ASM), with the latter providing between 140,000 and 200,000 jobs but often operating informally.
• China is the dominant force in the cobalt refining process, responsible for refining nearly half of all mined cobalt and accounting for 97% of world imports of the metal.
• Chile has attempted to move up the value chain by requiring SQM to sell up to 25% of its production at special prices to domestic companies developing lithium and battery products.
• The DRC has used export restrictions on cobalt and copper concentrates to encourage domestic crude refining, although these bans have often been waived due to a lack of local refining capacity and reliable energy.
• To avoid the risk of stranded assets and economic instability from mineral price crashes, producer countries are encouraged to diversify into mining-related services, such as specialized software, equipment, and metallurgy.

APA

Bridle, R., Bellmann, C., Loyola, V., Mostafa, M., & Moerenhout, T. (2021). Driving Demand: Assessing the impacts and opportunities of the electric vehicle revolution on cobalt and lithium raw material production and trade. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-07/electric-vehicle-cobalt-lithium-production-trade.pdf

Chicago

Bridle, Richard, Christophe Bellmann, Vicente Loyola, Mostafa Mostafa, and Tom Moerenhout. Driving Demand: Assessing the impacts and opportunities of the electric vehicle revolution on cobalt and lithium raw material production and trade. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-07/electric-vehicle-cobalt-lithium-production-trade.pdf.

Wikipedia

{{cite report |last1=Bridle |first1=Richard |last2=Bellmann |first2=Christophe |last3=Loyola |first3=Vicente |last4=Mostafa |first4=Mostafa |last5=Moerenhout |first5=Tom |title=Driving Demand: Assessing the impacts and opportunities of the electric vehicle revolution on cobalt and lithium raw material production and trade |publisher=International Institute for Sustainable Development |date=July 2021 |url=https://www.iisd.org/system/files/2021-07/electric-vehicle-cobalt-lithium-production-trade.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bridle2021driving, author = {Bridle, Richard and Bellmann, Christophe and Loyola, Vicente and Mostafa, Mostafa and Moerenhout, Tom}, title = {{Driving Demand: Assessing the impacts and opportunities of the electric vehicle revolution on cobalt and lithium raw material production and trade}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/system/files/2021-07/electric-vehicle-cobalt-lithium-production-trade.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }