Table of Contents

• What Is the Cobalt Crunch?
• Why Cobalt Matters for Tool Batteries
• The Global Supply Chain: Who Controls Cobalt?
• Can the U.S. Compete? (Mining, Policy, and Allies)
• Are We Friends with Congo?
• Big Players: EVs, Tool Brands, and Battery Giants
• Cordless Tools vs. Tesla: Who Gets First Dibs?
• The Push for Cobalt-Free Batteries
• 3 Public Stocks Tied to Cobalt
• What It Means for Contractors and Tool Buyers
• FAQ
• Wrap-Up: Should You Care About Cobalt?

Cobalt is a critical mineral used in the lithium-ion batteries that power everything from your impact driver to your F-150 Lightning. The problem? The world’s supply is getting squeezed, and the tool industry is caught in the middle of a much bigger fight.

This isn’t just a supply chain issue, it’s a geopolitical and economic storm involving the U.S., China, the Democratic Republic of Congo, and just about every EV and tech company on the planet. Cordless tools are at the bottom of the food chain, and what’s happening in the battery world today is already affecting what’s on your jobsite tomorrow.

In this article, we’ll break down what cobalt is, who controls it, why it’s becoming harder to get, and what it all means for tool brands, contractors, and even investors.

Why Cobalt Matters for Tool Batteries

Cobalt is one of the most important ingredients in high-performance lithium-ion batteries. For power tools, cobalt plays three critical roles:

• Stability – It helps prevent batteries from overheating or catching fire under heavy load.
• Energy Density – Cobalt allows for more power to be packed into a smaller, lighter battery. That’s crucial for cordless drills, impact drivers, and saws.
• Longevity – Batteries with cobalt tend to last longer and maintain performance over more charge cycles.

Most cordless tools from brands like Hilti, Milwaukee, DeWALT, Makita, Bosch, and RIDGID use batteries built on chemistries like NMC (Nickel-Manganese-Cobalt) or NCA (Nickel-Cobalt-Aluminum). These are the same battery types used in electric vehicles and electronics.

Here’s the catch: tool companies are now competing for the same cobalt supply as Tesla, Apple, GM and other companies with far bigger budgets and buying power. That competition is putting serious pressure on battery prices and availability.

Some brands have started experimenting with low-cobalt or cobalt-free chemistries (like LFP—lithium iron phosphate), but those often come with trade-offs like lower energy density or weaker cold-weather performance.

Bottom line: if you want long runtime, fast charge cycles, and compact battery packs, cobalt is still king and that’s why the “cobalt crunch” is hitting tools where it hurts.

If you're wondering why cobalt is such a choke point in the supply chain, the answer starts and almost ends with one country: the Democratic Republic of Congo (DRC).

• Roughly 70% of the world’s cobalt supply comes from the DRC. (When I was researching this article, I was amazed that one country controls so much).
• Another 10–15% is scattered across countries like Russia, Australia, Canada, and Indonesia, but none come close to Congo’s output.
• And here’s the twist: China controls most of the refining. Even when cobalt is mined elsewhere, it often ends up in Chinese processing facilities before it becomes usable in batteries.

***  Why does China control the refining?

• Over a decade ago, China recognized cobalt would be critical for EVs, electronics, and batteries.  While the West focused on tech innovation and final products, China invested heavily in refining infrastructure.
• Chinese companies gained control of major cobalt mines in the Congo.
• Lower labor costs
• Fewer environmental and regulatory hurdles.  The West has too much red tape and can not compete.
• Government-backed industrial strategy ensured steady growth.

Bottom line - China dominates cobalt refining because it acted early, focused on execution, and kept regulation light. The West missed the boat and is struggling to compete in a game China already controls.

This gives China enormous leverage over the entire battery supply chain. It's not just mining companies—it’s logistics, refining, and manufacturing. If you're a U.S.-based tool company trying to secure raw battery materials, you’re likely going through a Chinese-owned processor at some point.

Here’s the supply chain hierarchy:

1. Congo digs it out of the ground.
2. China refines it.
3. Battery manufacturers like Samsung SDI, Panasonic, and CATL build the cells.
4. Tool brands buy the batteries and package them into packs.

That’s a lot of middlemen, and every step in the chain adds both cost, vulnerability, and time. A political hiccup, labor dispute, or border shutdown in any one of those steps can delay tool production or spike prices overnight.

I pretty much answered the question in the previous section but there is a little more to it than just, "no, they can't compete."

The US does have cobalt, but not much, and most of it isn't economically viable to mine right now. The largest known U.S. source is the Idaho Cobalt Belt, which contains decent reserves but comes with environmental and regulatory hurdles.

• The U.S. produces less than 1% of the world’s cobalt supply.
• As of now, no U.S. cobalt mine is operating at full commercial scale.

So what is the US doing now?

The U.S. government knows cobalt is a vulnerability. Here's how they're responding:

• Strategic Materials Funding: The Department of Energy and Department of Defense are pouring money into domestic mining, refining, and battery R&D.
• Incentives for Friendly Sources: The Inflation Reduction Act offers tax breaks and subsidies to companies sourcing from allied countries.
• Partnerships with Allies: The U.S. is working with Canada, Australia, and South Korea to build a friendlier cobalt and battery supply chain—essentially a workaround to reduce dependence on China.

There is a catch - Developing these alternatives takes years. Meanwhile, demand is growing fast, especially with EV mandates (Which some have been rolled back in 2025) and power tool innovation surging. The U.S. may eventually be able to compete, but not before the current cobalt crunch forces tool brands to adapt or pay more.

Are We Friends with Congo?

I dug into this from multiple sources, and while there’s a lot of conflicting info out there, here’s what it comes down to: it’s complicated.

Yes, the U.S. has diplomatic ties with the Democratic Republic of Congo, but our influence is limited. The cobalt is in Congo, but much of the mining is controlled by Chinese state-owned or affiliated companies.

The U.S. is trying to stabilize the region and strengthen ties, mainly for strategic and political reasons, but we’re behind. China spent the last two decades building roads, schools, and mining infrastructure in exchange for long-term access to cobalt. Meanwhile, we’ve been asleep at the wheel.

So while we’re now throwing money at the problem, China still holds the upper hand when it comes to controlling cobalt out of Congo.

Companies like Tesla, BYD, GM, Ford and Volkswagen are the biggest drivers of cobalt demand right now. Electric vehicles require massive battery packs, each one using far more cobalt than a dozen cordless tools combined.

EV companies have deep pockets and long-term contracts with battery suppliers, giving them priority access to the cobalt supply chain. When shortages happen, guess who gets first dibs? It’s not Milwaukee or DeWALT.

Battery Manufacturers

The actual battery cells used in tools are made by large battery companies like:

• Panasonic
• Samsung SDI
• LG Energy Solution
• CATL (China)

These manufacturers build the cells and sell them to tool companies in packs. If you're a power tool brand without your own battery plant, you’re relying on these suppliers and competing with car companies and consumer electronics for their attention.

Tool companies like TTI (Milwaukee, RIDGID, Ryobi), Stanley Black & Decker (DeWALT, Craftsman), Makita, and Bosch are doing their best to lock in battery supply, but they’re often treated as secondary customers compared to the EV industry.

I know these tool companies are huge, but they do not compare to these car companies.  The chart below gives you an idea of who would get first dibs on products.  As an example (source Investing.com).  Here are the stats:

You can see by the numbers above, this is all ready answered but here is a little more to the story.

Tool brands don’t stand a chance against Tesla and other EV giants when it comes to cobalt access.

Battery allocation is all about volume and money.

• A single electric vehicle battery can use 10–20 pounds of cobalt.
• A cordless drill battery uses less than a few ounces.

That means EV manufacturers place larger orders, sign longer contracts, and can pay more per pound. Suppliers prioritize those deals because they’re more profitable and stable.

Tesla > Milwaukee

When the global supply tightens, Tesla doesn’t wait in line; they own entire supply contracts. Milwaukee, DeWALT, and Makita? I am sure they have contracts in place, but not sure they can compete on the levels like these EV companies can.  In fact, they’re probably left negotiating for what’s left or shifting to backup chemistries that may not perform as well.

It’s not just about quantity, it’s about leverage. Tesla has a dedicated battery supply ecosystem (like partnerships with Panasonic and CATL).

The Push for Cobalt-Free Batteries

With cobalt prices surging and supply chains under pressure, many companies, including tool brands are exploring cobalt-free battery chemistries. The leading alternative is LFP (Lithium Iron Phosphate). These batteries are cheaper to produce, more thermally stable, and have a long cycle life, all without using cobalt or nickel. That makes them attractive from both a cost and ethical standpoint.

But LFP comes with trade-offs. It has lower energy density, which means bulkier packs and less runtime in the same form factor. It also performs worse in cold weather, something that matters to tradesmen working outdoors in northern climates. While LFP works well in applications like electric buses or entry-level EVs, it’s not ideal for compact, high-output cordless tools just yet. Still, as research improves, we’re likely to see more tool brands quietly shift to cobalt-free options, especially in their lower-end or DIY lines.

I am not saying invest in these companies, but watching stocks tells a lot about the supply and demand in the market.  These companies are deeply involved in cobalt mining, refining, or supply.  These stocks can give insight into where the market is heading and how serious the squeeze really is.

• Glencore plc (Ticker: GLNCY) - (Switzerland Company) - Glencore is the world’s largest cobalt producer, with major operations in the DRC. If you own a lithium-ion battery, there’s a good chance Glencore’s cobalt is in it.
• CMOC Group Limited (Ticker: 603993.SS) - (Chinese Company) - This company owns a huge stake in Tenke Fungurume, one of Congo’s largest cobalt mines.
• Electra Battery Materials (Ticker: ELBM) - (Canada Company) - Electra is focused on refining cobalt in North America, aiming to reduce dependence on Chinese processors.

What It Means for Contractors and Tool Buyers

Bottom line: This isn’t just an EV problem. The cobalt crunch is hitting your tool trailer, and the effects are already trickling down in the form of price hikes, delayed launches, and shifting battery tech.

FAQ

Wrap-Up

If you're a contractor, tradesman, or tool enthusiast, you might think cobalt is just a behind-the-scenes issue but it's not. The cobalt crunch is already shaping what tools you can buy, how much you pay, and how long your batteries last.

This isn’t just about mining. It’s about global politics, supply chains, and who gets priority when resources get tight. Right now, tool brands are competing with EV giants, and they’re not winning. That means higher costs, more delays, and a shift in battery chemistry that could impact performance over time.

Whether you’re on the jobsite or in the aisle at Home Depot, cobalt is part of the story. Understanding the pressure behind the scenes helps you make smarter choices and might even help you stay ahead of the next price hike.