Cobalt has tripled in price since early 2025. The people building battery supply chains in the US and Europe should be paying close attention , not because of the price move itself, but because of what caused it, and what it reveals about who actually controls this market.

The trigger was an export ban imposed by the Democratic Republic of Congo in February 2025 , a response to a price collapse that had driven cobalt to near nine-year lows — which choked off feedstock flows and sent prices from roughly $21,000 per tonne to over $56,000 by mid-2026. The ban was lifted in October 2025 and replaced with an annual quota system, but the supply shock had already repriced the market. The deeper story is that a single country, one ranked among the world’s most fragile states supplies 76% of global cobalt production, and that Chinese companies hold ownership stakes in 15 of the largest copper and cobalt mines in the DRC. The West has known this for years. The policy response has been sluggish. Now the bill is arriving.

A Supply Chain Built on a Single Point of Failure

The cobalt market has no analogue in the critical minerals landscape for concentration risk. Not lithium. Not nickel. Not even rare earths, where China dominates processing but production is more geographically distributed. Cobalt’s primary supply is existentially dependent on the DRC, and the DRC’s cobalt sector is, in turn, existentially dependent on Chinese capital.

The mechanism of that dependence deserves to be understood precisely. The Sino-Congolais des Mines (Sicomines) agreement, signed in 2007, gave Chinese firms mining rights to deposits near Kolwezi valued at approximately $93 billion in exchange for infrastructure commitments worth $3 billion. That arrangement seeded the ownership structure that now shapes the entire global cobalt market. Chinese companies have built on it steadily, and China now refines approximately 70% of the world’s cobalt, regardless of where the ore originates. The West extracts some of the ore. China processes almost all of it.

The EV boom accelerated demand before any serious diversification of supply could take place. Cobalt consumption for battery applications alone is projected to exceed 300,000 metric tonnes annually by 2030 — roughly double 2022 levels. The primary supply response, constrained by mine development timelines measured in decades and by geopolitical arrangements measured in decades more, cannot keep pace. That is the structural problem recycling is now being asked to solve, at least in part.

The Recycling Value Chain: How Secondary Cobalt Actually Moves

Understanding where the recycling opportunity sits requires understanding how the value chain actually functions — because it is considerably more complex than the equivalent for copper or aluminium scrap.

The chain begins with collection and aggregation: end-of-life EV battery packs, consumer electronics, manufacturing scrap from cell production, and increasingly, batteries from early EV fleets now reaching end-of-life. The logistics of collection are non-trivial. EV battery packs are heavy, hazardous during transport if damaged, and arrive at end-of-life in forms that vary considerably by chemistry and format. Building reliable collection networks — including OEM take-back schemes, leasing arrangements that retain manufacturer ownership through the battery lifecycle, and municipally-organised electronics collection — is itself an infrastructure problem. It is also the stage where most recycled cobalt is currently lost, not through processing inefficiency but through batteries simply not entering the formal recycling system.

From collection, batteries move to pre-processing: discharge to safe voltage levels, sorting by chemistry, and partial or full dismantling of the pack structure. This stage remains labour-intensive and is often performed manually, particularly for non-standard battery formats. The economics here are under-appreciated: pre-processing cost is a material determinant of whether recycling a given battery type is financially viable, and it varies significantly by cell format and pack design.

Pre-processed batteries then undergo mechanical processing — typically shredding or crushing under controlled conditions — to produce what the industry calls black mass: a fine, dark powder containing cobalt, nickel, manganese, lithium, graphite, and residual electrolyte. Black mass is the primary traded intermediate in the battery recycling value chain, and it is where economics and geopolitics intersect uncomfortably. China currently has the largest installed base of black mass processing capacity, and Chinese buyers have historically offered competitive prices for black mass feedstock from European and American recyclers — meaning that secondary material often flows east before being refined and returned as cathode precursors. Addressing that dynamic is a central concern of both the EU’s Battery Regulation and the US Inflation Reduction Act.

Refining is the technically demanding stage that separates the metals within black mass. Two routes exist. Pyrometallurgy — high-temperature smelting — recovers cobalt and nickel as an alloy but loses lithium and manganese, produces slag requiring further treatment, and is energy intensive. Hydrometallurgy is increasingly the preferred industrial approach: the black mass is leached in dilute sulphuric acid, dissolving the valuable metals into solution, which is then processed through solvent extraction and selective precipitation to isolate cobalt sulphate, nickel sulphate, lithium carbonate, and manganese compounds as separate streams. Hydrometallurgical processes now achieve 95–99% recovery rates for cobalt and nickel, and 85–95% for lithium, making them substantially more resource-efficient than the pyrometallurgical alternative.

The refined cobalt sulphate then enters precursor cathode active material (pCAM) production, where it is combined with nickel and manganese sulphates in controlled ratios to produce the precursor compounds used in cathode manufacturing. This is the highest-value stage in the recycling chain and, currently, one of the most geographically concentrated — again, in China. The final stage, cathode active material (CAM) production and its re-entry into cell manufacturing, completes the loop. At full efficiency, cobalt recovered from an end-of-life battery can be back in a new cell within roughly twelve months. At current infrastructure maturity, the actual cycle is considerably longer.

The Policy Ratchet

Regulation is now applying meaningful pressure to each stage of this chain, and the timelines are not theoretical.

The EU’s Battery Regulation (Regulation 2023/1542), which entered force in 2023, establishes binding targets that become progressively more demanding. By end-2027, recyclers operating in the EU must achieve 90% material recovery for cobalt, copper, lead, and nickel. That rises to 95% by end-2031. More consequentially for the economics of the value chain, the regulation mandates minimum recycled content in new batteries: 16% cobalt by 2031, rising to 26% by 2036. These requirements create a compliance-driven floor of demand for verified recycled cobalt that does not currently exist in the market. They also create a premium for cobalt that can be traced through a certified EU supply chain  a premium that battery-grade recycled cobalt from domestically-based refiners is well positioned to capture.

The EU Critical Raw Materials Act, alongside the Battery Regulation, designates cobalt a strategic raw material and sets a target of sourcing 25% of EU strategic raw material consumption from recycling by 2030. These two instruments together are creating a regulatory architecture designed to pull investment into European refining and pCAM capacity — the stages of the value chain that currently leak value to China.

In the United States, the Inflation Reduction Act’s Critical Mineral Tax Credits have begun to incentivise domestic battery material production, and cobalt’s long-standing position on the US Critical Minerals List means it qualifies for the full suite of associated federal support. The practical effect has been to accelerate investment in domestic hydrometallurgical capacity, though significant scale has yet to arrive.

What the Numbers Actually Show

The headline recycling rate for cobalt looks encouraging: approximately 68% of cobalt in batteries is recovered at end-of-life globally, placing it well above lithium and manganese on that metric. The important caveat is that this figure reflects recovery rates in established markets with mature collection infrastructure primarily Europe, Japan, and South Korea  and that the first large cohort of end-of-life EV battery packs is only beginning to move through the system in meaningful volumes. The recycling infrastructure being built today will process the batteries sold in 2018–2022; the batteries being sold now will stress a recycling system that, by 2030, will need to handle volumes an order of magnitude larger.

The IEA estimates that under ambitious recycling scenarios, secondary cobalt could meet approximately 30% of demand by 2035. Under current trajectories, the figure is closer to 10–15%. The gap between those two outcomes is not primarily a question of processing technology  the chemistry is understood and the recovery rates achievable by hydrometallurgy are already high. It is a question of collection infrastructure, refining capacity, and supply chain traceability. All three are engineering and logistics problems that yield to capital, policy continuity, and time.

The global black mass recycling market, which provides the clearest market signal for this activity, was valued at approximately $16.8 billion in 2025 and is projected to reach $84 billion by 2035, growing at a CAGR of 17.6%. Among the major operators, Umicore held over 15% market share in the battery recycling sector in 2025, with a 150,000-tonne European facility in development. Glencore’s August 2025 acquisition of Li-Cycle, which had built a significant North American spoke-and-hub collection and black mass production network, brought major primary mining capital directly into the recycling value chain — a signal worth noting. Redwood Materials reported 95%+ critical material recovery rates from its South Carolina facility in late 2025, demonstrating that domestic US hydrometallurgical processing at scale is achievable.

Why This Matters for Manufacturers and Investors

The cobalt recycling value chain is not a peripheral sustainability consideration. It is becoming a compliance requirement, a cost management tool, and a competitive differentiator simultaneously.

For EV manufacturers and battery producers with EU market exposure, the 2031 recycled content mandates are a procurement planning horizon, not a distant aspiration. Securing offtake agreements with EU-based refiners or investing in closed-loop arrangements with recycling partners now is the approach that avoids a scramble for compliant material in five years. For manufacturers relying on Chinese-refined cobalt sulphate — which is most of them the regulatory direction of travel on content traceability and sourcing geography is clear, and repositioning supply chains takes time that is already running short.

For investors, the value chain analysis points to specific bottlenecks where capital is most needed and most differentiated. Collection logistics and pre-processing remain fragmented and underinvested relative to the volumes that will arrive within this decade. Hydrometallurgical refining capacity outside China is the single largest gap in the Western recycling chain it is the stage that determines whether black mass becomes a domestically-refined strategic asset or a feedstock export. And pCAM production in the US and EU is almost entirely absent at the scale required by the Battery Regulation’s 2031 targets.

The recycled cobalt market is projected to grow from $1.46 billion in 2024 to $4.72 billion by 2034. That trajectory is underpinned by regulation, by supply scarcity in the primary market, and by the straightforward economics of a metal that produces 80% less greenhouse gas when recycled than when mined and refined from ore.

What to Watch

Three dynamics will determine whether the cobalt recycling value chain develops quickly enough to matter for the current energy transition cycle.

First, the pace of collection infrastructure deployment in the US and EU. The first-generation EV fleets are entering end-of-life now. Whether those batteries are captured by domestic recyclers or exported as black mass to Asia will shape secondary supply availability for the next decade. Policy instruments  extended producer responsibility schemes, OEM take-back mandates, infrastructure co-investment exist to accelerate this, but implementation is uneven and enforcement is nascent.

Second, the investment trajectory in Western hydrometallurgical refining capacity. Glencore’s acquisition of Li-Cycle and Redwood’s South Carolina facility suggest that the capital is beginning to move. But the gap between current capacity and what the EU Battery Regulation’s 2031 targets imply is substantial, and the facilities that need to be operational by 2031 need to be under construction within the next two to three years.

Third, the stability of DRC primary supply. Cobalt at $56,000 per tonne makes recycling economics more attractive than at $21,000. But the price signal that makes secondary cobalt compelling is itself evidence of a primary supply system under stress. If DRC export controls tighten further, or if sovereign risk events disrupt major Chinese-operated mines, the recycled supply chain that is still being built will be the only available response. Building it before that scenario arrives is considerably easier than building it during one.

The battery in the next generation of electric vehicles will, if policy succeeds, contain cobalt that was in a previous battery. The infrastructure to make that happen is being assembled now. The window for Western manufacturers and investors to position themselves inside that value chain rather than outside it, buying from whoever builds it first is measured in years, not decades