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The high demand for electric vehicles and the rise of copper, lithium and cobalt

Electric or hybrid vehicles are expected to reach 27 million by 2027, but what does this mean for the mining industry?

The demand for Copper, Lithium and Cobalt demand is expected to explode. The International Coal association recently released a report that shows that there will be a “significant” increase in the demand for copper over the next ten years.

The current copper demand for 2017 stands around 185,000 tonnes but over the next decade the industry can fully anticipate an increase to 1.784 million tonnes come 2027.

Copper is used substantially in the make up the batters of electric vehicles as well as being a major component in the windings and copper rotors. For example, a single electric car can have anywhere up to six km of copper wiring.

Let’s look at it a little broader.

Cars using internal combustion engines require up to 23 kg of copper each, but the ICA report found that a hybrid electric vehicle uses nearly double that amount at 40 kg of copper, and a plug-in hybrid electric vehicle uses 60 kg. Couple that with an electric bus that can use between 224 kg and 369 kg of copper and you can already see where the incredible increase is coming from.

So, what of Cobalt and Lithium? Looking at 2017, the current estimate for global consumption of refined cobalt looks set to reach 100kt and report from CRU Group has revealed that the demand for cobalt will increase at an average rate of five percent per year over the next ten years.

From a price perspective, the price of cobalt has surged well over 150 percent since its industry low back in January 2016.

As a key component of lithium ion batteries, which are of course used in electric cars, the demand for smart devices and other consumer electronics will only continue to see the demand and consumption of cobalt soar.