bbc.

com

Could you cope with smartphone

rationing?
By Ian Hardy Technology of Business reporter
7-9 minutes

Image copyright Getty Images

Image caption The use of child labour at cobalt mines has attracted
criticism from human rights groups

A number of metals are crucial components in a range of

technologies, from smartphone batteries to electric cars. So could a
market shortage and spiralling prices put the brakes on the global
tech industry?

Cobalt has been used for thousands of years to give a deep blue-ish
hue to pottery, paint and jewellery. But more recently, it has become

1 of 7
a crucial metal used in the batteries powering millions of tech
gadgets, including the electric cars made by Tesla and others.

About half of all cobalt demand comes from the expansion of electric
vehicle production and development worldwide.

The problem is, we can't get enough of it. No wonder its price has
doubled in the last year alone.

"We are definitely entering a period of deficit and that will start this
year," says Lara Smith, managing director of Core Consultants, a
commodities researcher.

"In 2016, the supply of cobalt was about 104,000 tonnes and
demand was about 103,500. The hybrid and electric vehicles are in
a nascent growth phase, so as we continue along this track we
expect there to be a greater and greater deficit."

Image copyright Reuters

Image caption Will the growth of electric vehicles be slowed by a shortage
of cobalt?

Only 2% of cobalt is mined directly - 98% of it is produced as a

2 of 7
by-product of nickel and copper mining. Unlike other battery metals
like lithium, cobalt is quite rare and its quality can vary
geographically. About two thirds of the supply comes from Africa's
Congo region.

It's little wonder then that First Cobalt Corporation in Toronto recently
invested in seven large areas of land in the Central African
"copperbelt" with the intention of finding more copper and cobalt
reserves in the ground.

"Electric vehicle market penetration around the world is projected to

grow 26% this year alone," chief executive Trent Mell tells the BBC.

"We are predicting a growth rate in cobalt demand of 5% per year

for the next five years. On the supply side the pipeline of new
production is pretty scarce.

"To bring up a mine to full production can take up to 10 years."

Image copyright First Cobalt Corporation

Image caption First Cobalt Corporation boss Trent Mell surveys potential
cobalt mine land in central Africa

3 of 7
Efforts to mine cobalt in North America are under way, but any
increase in US and Canadian production is expected to be small
compared with future anticipated demand globally.

And the Congo mining region has also been under scrutiny as it
deals with accusations of child labour and other human rights
abuses, summarised in an Amnesty International report last year.

In other words, ramping up supply could take quite some time.

And this shortage in the supply of tech-dependent metals is not

limited to cobalt.

Many modern electronics rely on so-called "technology metals" -

neodymium, praseodymium and dysprosium to name but a few -
which make them faster, lighter, stronger, and more energy efficient.

Image copyright Getty Images

Image caption If the metals our gadgets need become hard to get hold of,
you could wait years for that upgrade

These rare earth metals along with minor metals such as lithium and
tantalum are now just as important as the traditional base metals

4 of 7
and precious metals.

"The colour red on a MacBook Pro screen is made from europium;

the colour green is because of a metal called terbium; touch screen
technology relies on indium," explains David Abraham, author of a
book called The Elements of Power.

"A lot of these metals have only been discovered in the past 100
years. We've had a long time to play with copper and iron. But we
are just beginning to understand the power of these newer
materials."

Unlike cobalt, most other technology metals are not rare. It's getting
them out of the ground and in to manufacturing locations that's
tricky.

Again, most are by-products of other base metal mining activity and
involve additional complex chemical extraction processes.

China dominates the mining and production of many technology

metals, due in part to weak environmental codes. It produces 100%
of the worlds dysprosium for example.

While there is lots of talk amongst other nations - notably Australia -

about starting their own mines and processing centres, there is little
real appetite for it, believes Mr Abraham.

A lot of countries don't want to open new mining and processing

facilities because they are deemed "dirty" and environmentally
unpopular, he says.

The alarm bells for tech companies sounded in 2010/11 when the
prices of several rare and minor metals sky-rocketed.

"There was a major price spike in some of these materials," says

Gareth Hatch, co-founder of consultancy group Technology Metals

5 of 7
Research.

"Some went up anywhere from 300% to 1,000% in price for a variety

of reasons, and that alerted everyone to the fact that we are
dependent on these materials and they are all coming from China -
and that could be a problem."

Image copyright Apple

Image caption Apple's Liam robot disassembles the iPhone to recover
metals such as cobalt, lithium and gold

Although prices of most elements have normalised again, the fact

that China has so much influence over supplies is a cause of
increasing concern.

Political and economic differences between China and the West are
a constant conversation topic in the US and elsewhere. Find
yourself on China's "less than co-operative" list and you could
potentially see your essential supply of tech metals dry up overnight.

One way of breaking China's stranglehold is to recycle the materials.

Apple is a leader in this field, marshalling a line of robots called Liam

6 of 7
to disassemble used iPhones in a few seconds, enabling recovery
and reuse of many of the materials used, such as cobalt, indium and
gold.

But it's hard for the technology companies to predict what will
happen in a decade from now.

If supplies of crucial elements dwindle, prices of new gadgets are

likely to rise if supply cannot match demand.

Perhaps then, we may have to learn to live with with our existing
gadgets for longer.

7 of 7