Glencore chief warns of Asian battery race to secure cobalt supply

Glencore chief warns of Asian battery race to secure cobalt supply

Glencore chief warns of Asian battery race to secure cobalt supply Energy Storage Journal


Ivan Glasenberg, chief executive of mining giant, Glencore

Ivan Glasenberg, chief executive of mining giant Glencore warned on March 20 that the supply chain of cobalt, one of the most important materials in the manufacture of lithium ion batteries, is being monopolized by Asia. He said Western battery makers need to wake up to the fact that demand will soon outstrip supply of the key material.

Speaking at FT Commodities Global Summit in Switzerland, he said: “The motor car industry hasn’t woken up to the fact, to how important cobalt is and how tight cobalt supply] is,” according to the Financial Times newspaper.

“The Chinese will have most of the off take of cobalt. They’re not going to sell batteries to the world, more than likely they’ll produce batteries in China and sell electric vehicles to the world.”

On March 19, news agency Reuters, reported how Asian battery makers, especially in Japan and Korea, are looking toward early-stage cobalt projects in Australia and Canada to lock down supply before the projected material shortage in 2020.

The agency quoted Joe Kaderavek, chief executive of Australia’s Cobalt Blue, as saying:  “We are starting to see the first signs of an arms race to secure long term cobalt supplies.

“With over 85% of new global cobalt supply over the next decade coming from Africa, in a region where the Chinese have entrenched relationships, the Korean and Japanese cobalt processing industries are very focussed upon Australian and Canadian projects.”

Last month South Korean battery maker SK Innovation secured a seven-year deal with Australian Mines to receive supplies of cobalt sulphate and nickel sulphate from its Sconi project. The first supplies are not expected until at least 2020.

At least six other Australian and Canadian mine developers are in talks to secure supply deals with battery and automakers for production beyond 2019-2021, Reuters reported.

These include Australia’s Aeon Metals, Northern Cobalt and Cobalt Blue, and Canada’s Ecobalt and Fortune Minerals. China’s cathode material firm Beijing Easpring Material Technology has also signed a five-year deal with Australian mine developer Clean Teq.

In 2017, the Democratic Republic of Congo produced 68 tonnes of cobalt, compared to 54,000 tonnes by the rest of the world.

Despite concerns over the use of child miners and rising royalties in the country output and production is set to rise to meet demand from battery makers.

For instance, Tesla’s 35GWh factory in the US will need around 7,000 tonnes of the material each year once fully operational. In 2015 the battery industry used 11,375 tonnes of unrefined cobalt for every 9,760 tonnes of finished product.

Last month ESJB reported how firms such as consumer OEMs Apple and Samsung and vehicle OEMs BMW and Volkswagen are scrambling to secure long-term cobalt supply contracts.