BHP Group, the Australian mining giant, is positioning itself to benefit from a shift in global cobalt supply, according to industry analysts. Cobalt, a key component in electric vehicle batteries, has seen its supply chain increasingly concentrated in the Democratic Republic of Congo (DRC), which accounts for over 70% of global production. However, concerns over ethical sourcing and geopolitical risks have prompted Western companies to seek alternative sources.
BHP operates the Nickel West project in Western Australia, which produces cobalt as a by-product of nickel refining. In 2025, the company produced approximately 3,000 tonnes of cobalt, a figure expected to rise as it expands its nickel operations. The company has also signed offtake agreements with battery manufacturers, including a deal with Tesla, to supply nickel and cobalt from its Australian operations.
Analysts note that while BHP's cobalt output is small compared to its iron ore and copper operations, the strategic value lies in its 'clean' cobalt, which is produced with lower carbon emissions and without the ethical issues associated with DRC mining. This could command a premium as automakers and battery makers seek to secure sustainable supply chains.
However, cobalt prices have been volatile, falling from a peak of over $80,000 per tonne in 2022 to around $25,000 per tonne in mid-2026, due to oversupply and the rise of lithium-iron-phosphate (LFP) batteries that use less cobalt. BHP has not made any major new cobalt-specific investments, instead focusing on its core commodities.
In summary, BHP is well-placed to benefit from the cobalt supply shift, but the financial impact remains modest given the current price environment and the company's diversified portfolio.
