Australia Poised To Crack Cobalt Code For Electric Vehicle Batteries

Can Australia Turn Cobalt into a Viable Battery Supply Chain?

As 2025 drew to a close, Australian miner Cobalt Blue Holding (CBH) met a much-coveted milestone – it produced cobalt sulphate that met the stringent specifications required for Precursor Cathode Active Material (pCAM) manufacturing, a key step in entering battery supply chain qualification processes.

The powdered mix of transition metals, pCAM is crucial for lithium-ion battery cathodes; however, it is only produced by a select, but growing number of producers outside of China. The country also accounts for around 85% of battery-grade cobalt sulphate. CBH’s proprietary flowsheet process for cobalt sulphate aims to produce the same product as Chinese refiners, but uses a salty brine process rather than acids.

This innovative approach has the potential to disrupt the traditional refining landscape and provide Australia with a competitive edge. The next step is to build the refinery in Kwinana [Western Australia], and then, because it is a different plant, the company will have to go through the qualification process all over again.

CBH’s achievements are a tentative win for Australia’s wider bid to build out its battery manufacturing value chain, in which it has invested millions in government funding. The Minerals Research Institute of Western Australia (MRIWA) and Commonwealth Scientific and Industrial Research Organisation are also involved in the Cathode Precursor Production Pilot Plant (C4P), one of only a small number of facilities globally pursuing pilot production of pCAM.

Producing battery-grade material requires extremely high purity levels and tight process control, reflecting a shift from mining into advanced materials processing. Researchers at C4P are tweaking formulations and testing impurity tolerance while lowering costs. However, this is difficult to achieve outside China, where scale, integration, and cost efficiencies are already established.

Usha Haley of the Stern School of Business at New York University explains that for Australia to build a competitive cobalt refining and pCAM production process from scratch means competing against China. “Subsidy-driven under-pricing and technology investments have created technical barriers in hydrometallurgical refining, solvent extraction, and the nanoscale purity demands of electric vehicle (EV) battery manufacturers.”

Haley adds that Australia’s structural vulnerabilities include high labour costs, fragmented regulatory frameworks, limited domestic demand, and capital markets oriented toward short investment horizons. These constraints are reinforced by broader industry trends identified in GlobalData’s Australia Mining Review 2025 report.

CBH’s achievements are a tentative win for Australia’s wider bid to build out its battery manufacturing value chain. The company had hoped to be in a position to secure finance by the end of last year, but was held back by volatile markets and changing government policy.

The risk for investors is perceived as high because processes need to be proven again at scale. Major Japanese mining company Sumitomo Metal Mining has invested in the Kalgoorlie Nickel Project, which could hold 437 million tonnes of resource. Australian company Lynas Rare Earths has also inked a $137m deal with US President Donald Trump’s Department of War.

The deals are giving hope to CBH’s refinery plans. The company needs new offtake partners – banks typically require 60-80% offtake in place. However, there is a lack of willingness to pay a premium for supply chain diversification.

While Australia is advancing technical capability in battery materials, the decisive constraints remain economic, structural, and market-driven rather than purely technological. The Australian Government is actively attracting investment in the critical minerals sector through the Critical Minerals Strategy 2023–2030 and the Future Made in Australia plan.

However, it is unclear whether these efforts will offset cost disadvantages. Haley notes that it will require a premium for sustainable supply chain diversification – “but there appears limited willingness to pay in practice.”

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