The news: The global rush to secure critical minerals for clean energy technologies has prompted a group of billionaire investors to back a mining endeavor in Greenland.
- Bill Gates, Jeff Bezos, and Michael Bloomberg are funding KoBold Metals, which will be exploring Greenland for cobalt, nickel, and other minerals. The company’s recent funding round garnered $192.5 million, per Vanity Fair.
- In 2019, KoBold also raised funding for Greenland exploration from Andreessen Horowitz and Breakthrough Energy Ventures.
- KoBold announced Thursday that it will begin drilling on Greenland’s west coast, having gained a 51% stake in the Disko-Nuussuaq project operated by Bluejay Mining, per Reuters.
- KoBold’s unconventional mining approach uses machine learning (ML) algorithms to predict productive mining locations, reportedly for both cost-savings and environmental benefits.
How we got here: Cobalt and nickel are important components of EV batteries and consumer electronics. However, availability of such minerals is becoming scarcer, fueling a race to secure supplies by diversifying where they’re sourced.
- Human rights violations associated with cobalt mining activities in the Democratic Republic of Congo, including the deaths of child laborers, have spurred companies to look elsewhere for the metal, dubbed “green gold.”
- Supply chain challenges have sent cobalt and nickel prices soaring. In March 2022, cobalt leapt to $82,000 per metric ton, up from $29,000 per ton in July 2020, per Vanity Fair. Demand for cobalt is predicted to swell at least threefold by the end of the decade.
- While a smartphone only uses a few cents worth of cobalt, an EV battery uses several thousands of dollars’ worth, according to Vanity Fair. A global clean energy transition would cost about $10 trillion in cobalt, nickel, lithium, copper, and rare earth elements.
The problem: Diversifying cobalt and nickel supplies might help meet demand in the short term, but the long-term return on investments in new mining operations is less clear. Without question, however, it will be politically controversial.
- Tesla, which leads the global EV market, used lithium iron phosphate (LFP) batteries with no cobalt or nickel in nearly 50% of its EVs manufactured in Q1 2022, per Electrek.
- With LFP batteries in the Model 3 Tesla achieving a 267-mile range, we’ll increasingly see interest in the battery type, especially with more public charging stations on the way to help with range anxiety.
- R&D efforts to develop solid-state batteries, in addition to ramping up EV-battery and e-waste recycling efforts, can help diminish the need for more mining.
- Given Greenland’s already ecologically fragile landscape due to climate change, scientists are concerned that mining could cause further damage despite KoBold’s high-tech strategy.