As cobalt prices, a key raw material for electric vehicle (EV) batteries, remain at record highs, Korea's battery industry is growing increasingly concerned. Cobalt is essential in the NCM (nickel, cobalt, manganese) and NCA (nickel, cobalt, aluminum) ternary batteries where Samsung SDI, LG Energy Solution, and SK On are competitive. Recently, the battery industry has been going all out to develop de-cobalt batteries.
According to market research firm Trading Economics on the 20th, cobalt has been trading at about $56,290 per ton (about 84 million won) since January. Compared with Jan. 2025, when cobalt moved around $19,000 per ton, the price has nearly tripled in one year. Cobalt prices have held at their highest levels since July 2022 for two straight months.
Cobalt is a rare metal that reduces a battery's volume and weight and enhances stability. Its mining regions are limited, and refining is said to be difficult.
According to a report released by the U.S. Geological Survey (USGS) in Feb., about 75% to 80% of the cobalt mined worldwide is produced in the Democratic Republic of the Congo. China controls most of the refining capacity.
The reason cobalt prices have surged is that the Democratic Republic of the Congo, a major producer, is restricting export volumes. As cobalt has gained attention as a strategic mineral, the Congolese government has implemented a quota system limiting cobalt export volumes since Oct. last year.
The Congolese government set last year's annual export cap at 87,000 tons and this year's cap at 96,600 tons. Compared with the 170,000 tons of cobalt produced in the Democratic Republic of the Congo in 2024, it has effectively tied it down to about half.
When cobalt prices rise, Korea's three battery makers are also affected. In NCM and NCA batteries, cobalt accounts for 15% to 20%, increasing cost pressures.
Typically, battery makers sign price-indexed contracts with automakers to defend against short-term price spikes. When prices of key minerals such as lithium, nickel, and cobalt rise, the increase is reflected in battery selling prices.
A battery industry official said, "We have secured a certain amount of inventory, so it does not immediately affect revenue or production," but added, "If battery prices rise and the final price of EVs becomes more expensive, consumer purchase demand will decline and battery production will contract again."
Korean battery corporations are exploring various ways to reduce the share of cobalt in batteries. The representative approach is high-nickel technology. It features increasing the nickel share in the cathode to over 90% and reducing cobalt to 5% or less, maximizing energy density. All three battery makers have developed NCA, NCM, and NCMA (nickel, cobalt, manganese, aluminum) batteries that cut cobalt content to 5%.
LFP (lithium, iron phosphate) batteries, which use no cobalt or nickel at all, are also cited as an alternative. Although LFP batteries have lower energy density, they are evaluated as suitable for energy storage systems (ESS) because their production cost is low and they carry less fire risk.
The global LFP battery market has been dominated by Chinese companies, but as the market for ESS batteries expands rapidly, Korean corporations have also begun ramping up full-scale production this year. NMX (nickel, manganese, rich) is also presented as an alternative product.
Another battery industry official said, "With a lot of lines diversified into LFP battery production recently, we expect the impact of cobalt price increases to be limited compared with the past," adding, "The industry trend is moving toward batteries that use less cobalt."