Indonesia Emerges as the Top Cobalt Producer Outside of Africa
Indonesia has emerged as a significant player in the global cobalt production, becoming the second-largest producer of the battery material.
According to US government data, Indonesia surpassed other countries such as Russia and Australia to secure the second spot in 2022.
This expansion is expected to continue this decade, reducing the world’s dependence on the Democratic Republic of Congo for over two-thirds of cobalt supplies and avoiding potential shortages.
Indonesian President Joko Widodo has been promoting the country’s battery and EV industries, leveraging its abundant mineral resources.
The country already produces about half of the world’s nickel, and its share of the global cobalt output is expected to reach nearly 20% by 2030, up from around 1% in 2021, as per Benchmark Mineral Intelligence.
The expansion of cobalt production in Indonesia has been fueled by billions of dollars of investment from Chinese companies in refineries that produce cobalt along with nickel.
Leading investors include Tsingshan Holding Group, Zhejiang Huayou Cobalt, and CATL, the top battery manufacturer. According to Benchmark Mineral Intelligence, Indonesia’s cobalt output is expected to more than double again in 2023.
The increase in Indonesian cobalt supply has alleviated concerns over tight cobalt supplies and helped soften global cobalt prices, which have declined by over 50% since May 2022 and 13% in 2023 thus far
. While some manufacturers and automakers are trying to phase out cobalt from their batteries due to ethical concerns about DRC production and price volatility, the surge in Indonesian supply could address these concerns.
According to Rystad Energy analyst Susan Zou, the global cobalt market is expected to be in surplus this year, and prices will remain low in the near term as supply expands.
Zou stated that there is a new project announcement in Indonesia every 3-4 months, making it a game changer in the global cobalt market.
