Material Insights · Understanding the Material World

Cobalt and Nickel

About a fifth of by-product cobalt comes from nickel ores, and Indonesia's high-pressure acid leach (HPAL) plants have made it the second largest cobalt producer, selling nickel and cobalt together in mixed hydroxide for batteries; both metals also share the NMC battery market and the threat from LFP, which uses neither.

Cobalt (commodity) and Nickel (commodity): 3 relationships.

How they are linked

1. By-product of nickel

Joint production · Asymmetric · Nickel mining → cobalt

Nickel laterite and sulphide ores contain cobalt, which is recovered when the nickel is processed.

  • about 22% share of by-product cobalt that comes from nickel deposits

Nickel mine output, about 3.9 Mt in 2025, is more than ten times cobalt mine output, and nickel prices drive investment, so cobalt from nickel rises with nickel projects rather than with cobalt demand.

Sources: USGS; USGS; International Institute for Sustainable Development (IISD)

2. Indonesian HPAL and mixed hydroxide

Joint production · Rising · Indonesian laterite → nickel and cobalt together

High-pressure acid leaching of Indonesian laterites yields a nickel-cobalt mixed hydroxide for batteries, so each new plant adds both metals.

  • about 14% Indonesia's share of world cobalt mine output, 2025 (44,000 t)
  • about two thirds Indonesia's share of world nickel mine output, 2025 (2.6 of 3.9 Mt)
  • about 82% growth in Indonesian cobalt output in 2024, to about 30 kt

Indonesia's nickel output grew about 13% in 2025 as new operations ramped up, and HPAL drove its cobalt growth, making it the second source after Congo. The two prices still diverged in 2025: LME nickel fell about 11% to about $15,000 a tonne, while cobalt averaged $15 a pound against $11.84 in 2024 after Congo's export ban.

Sources: USGS; USGS; Cobalt Institute

3. Battery cathodes

Shared risk · Medium · Battery demand → both

Nickel-rich cathodes such as NMC use both metals, so battery chemistry choices move demand for nickel and cobalt together.

  • about 43% electric vehicle battery share of cobalt demand, 2024
  • over half battery share of global cobalt demand

Cobalt-free lithium iron phosphate cells use neither metal and hold a significant market share in China, which makes LFP a shared threat to both. LFP has lower energy density but is cost-effective, so cobalt-based cells keep a role where energy density matters.

Sources: USGS; International Institute for Sustainable Development (IISD); Cobalt Institute

For investors

Key learnings

  1. Indonesian HPAL makes nickel and cobalt a joint output, so nickel expansion there adds cobalt supply.
  2. Cobalt from Indonesia diversifies supply away from Congo, which still produced about 73% of the world total in 2025.
  3. Battery chemistry is a shared risk: LFP cuts demand for both, while nickel-rich chemistries support both.

What to track

  • Indonesian nickel and MHP output: Joint supply growth for nickel and cobalt (Monthly · Indonesian ministry data, company reports)
  • Battery cathode chemistry mix (LFP versus NMC): Demand outlook for both metals (Quarterly · industry reports)
  • LME nickel and cobalt prices: Divergence shows separate shocks, such as Congo's cobalt quota (Daily · LME)

For policymakers

Key learnings

  1. Indonesia's model of processing ore at home has turned it into a major source of both metals, a model relevant to India's own mineral processing policy.
  2. Battery chemistry choice changes how much cobalt and nickel an EV industry needs to import.
  3. Supply of both is concentrated, with Congo at about 73% of cobalt and Indonesia at about two thirds of nickel mine output in 2025, so partnerships and stockpiles both matter.

What to track

  • Battery chemistry mix in domestic cell plants: Import needs for nickel and cobalt (Yearly · Ministry of Heavy Industries, PLI reports)
  • Cobalt and nickel import sources: Concentration risk (Yearly · Ministry of Commerce trade data)

Sources

  1. Mineral Commodity Summaries 2026: Cobalt, USGS (2026)
  2. Mineral Commodity Summaries 2026: Nickel, USGS (2026)
  3. Commodity profile: Cobalt, International Institute for Sustainable Development (IISD) (2026)
  4. Cobalt factsheet, July 2025, Cobalt Institute (2025)