Department of Defense Signs Deal to Boost Cobalt Supply Chains

A plaque of the Department of Defense seal is seen at the Pentagon in Washington, D.C., on Jan. 26, 2012. Mandel Ngan/AFP via Getty Images

The U.S. Department of Defense (DoD), on June 15, entered into an agreement with the United States arm of Australian miner Jervois Global Limited to conduct feasibility studies to expand cobalt extraction in Idaho.

The $15 million funding agreement will enable Jervois Mining USA to undertake mineral resource drilling to expand currently known cobalt resources at its Idaho Cobalt Operations (ICO) and the adjacent Sunrise deposit.

The deal also allows Jervois Mining USA, a Nevada corporation based in Idaho, to undertake studies to assess the feasibility of a domestic cobalt refinery.

The agreement is being made through the Office of the Assistant Secretary for Industrial Base Policy, the principal adviser to the undersecretary of defense for acquisition and sustainment.

The project is a critical step in the country’s effort to decrease reliance on foreign sources of strategic and critical minerals, like cobalt, the DoD said.

“In investing in domestic cobalt resources, Industrial Base Policy is building a sustainable, responsible industrial base capable of meeting our future national defense challenges,” said Dr. Laura Taylor-Kale in a statement. “Investments such as these execute President Biden’s focus on strengthening supply chains for critical minerals for large capacity batteries and are one step in the Defense Department’s strategy for minerals and materials related to batteries.”

Demand for cobalt has surged in recent years, and automakers are adopting strategies to hedge against the turbulent market. General Motors, Tesla, Nissan, and other electric vehicle (EV) makers pledged in 2022 to build cars with cobalt-free lithium-ion batteries to both lower costs and reduce reliance on foreign sources of cobalt.

Battery metals are becoming as critically essential to the auto industry. A battery is simply a device that stores chemical energy for later conversion to electrical energy, and the chemistry used in different battery types greatly impacts their cost, safety, power, and longevity.

Cobalt in EV batteries

Cobalt is used in multiple munitions and high-temperature aerospace alloys, according to the DoD. It has critical applications in high-capacity batteries for military and commercial EVs and is on the U.S. government’s critical minerals list.

Most electric vehicles in the United States use a lithium-ion battery that requires cobalt and nickel to function. While lithium is a relatively plentiful metal, both cobalt and nickel are scarce, expensive and controversial.

According to the U.S. Department of Energy, EV batteries can have up to 44 lbs. of cobalt in each 100 kilowatt-hours pack. The metal makes up to 20 percent of the weight of the cathode in lithium-ion EV batteries, and cobalt is considered the highest material supply chain risk in EV production.

The Biden administration sees widespread adoption of EVs as a cornerstone of its net-zero strategy. As automakers gear up to achieve ambitious electrification goals, a shortage of the materials needed in batteries has sparked a global rush to secure those supplies. The global market size of cobalt is expected to reach more than $19.4 billion by 2030, according to a recently updated report from Straits Research.

There are approximately 27 million electric vehicles on the road globally, and by the end of 2023, the number is expected to cross 40 million. EV adoption is increasing in the United States and Europe through governmental subsidies and related promotions.

Naveen Athrappully and CNN Wire contributed to this report.