South Korea's SK Innovation has signed an agreement to buy cobalt from Switzerland-based trading firm Glencore, locking in supplies of a key component for its electric vehicle (EV) battery business.
The contract runs from 2020 through to 2025 and calls for total purchases of about 30,000t of cobalt, enough to supply batteries for 3mn EVs, SK said. Pricing and other terms were undisclosed.
SK said it is laying the foundation to meet growing demand for its batteries by lining up supplies from Glencore. South Korean battery producers are working to ensure adequate supplies of core materials with new factories under development and order backlogs increasing.
LG Chem signed a contract in September to buy 125,000t of nickel, manganese and cobalt cathode materials from Umicore of Belgium. Samsung SDI said it expects European automakers to about double their EV production next year as more generous subsidies and more stringent emission rules take effect.
SK said it sees the EV battery market growing at an average rate of 25pc/yr, reaching 182 trillion won ($152.5bn) in 2025. It sees global cobalt demand rising to 92,000t in 2025 from an estimated 32,000t in 2020.
By Tony Cox
