by George Hetling
Jervois Global has mothballed a new cobalt mining project in Idaho as the mineral’s price continues to plunge.
The Australian company has also cut jobs and pay for corporate and senior management roles to further reduce costs. A company representative told Bloomberg these measures are due to “adverse cobalt market conditions caused by Chinese overproduction and its impact on pricing.”
Since 2020, western imperialist powers, under the general direction of the US, have sought to displace key Chinese monopolies. It amounts to a trade war to set up infrastructure to compete with the Chinese Social Imperialist Belt and Road initiative. Cobalt is a particularly monopolized mineral, with Chinese refineries accounting for 80% of the global supply, and is a key mineral in the production of lithium ion batteries, which are mainly used for smartphones and electric vehicles. Jervois Global is a key player in this move, as Australia is the second largest refiner of the mineral at around 8% of the global supply.
Cobalt’s price has plummeted in price since mid-2022, as the general crisis of overproduction turns toward depression in the industry. China contains the most surplus of the mineral, and is better prepared to weather the storm of the depression. The delay of the Idaho mine, which would be the first of its kind to open on US soil in decades, is proof of this imbalance. Jervois Global’s share price has gone from a high of $0.80 AUD to a low of about $0.04 AUD at the time of writing, reflecting Cobalt’s fall in price from $37/lb to $13/lb in the same time period.
A secondary reason for the fall in price is the pivot that many automakers made away from cobalt and towards less efficient batteries for newer EV models in the face of record high prices. This also helps western countries reduce “reliance” on China, although in general they remain incredibly reliant on Chinese and other Asian miners, refiners, and manufacturers.
As a further move, the Biden administration has removed the EV tax credit for any model that sources Chinese cobalt, with further metal restrictions on Chinese sources coming next year. This further pushes the market away from cobalt broadly. It is also in line with the general reduction in the availability of EV tax credits in imperialist countries, as the growth of the industry levels off, falling itself into a crisis of overproduction.
