Regional battery material supply chains emerging

Increasing initiatives are under way to create integrated upstream and downstream regional battery material supply chain clusters in an attempt to reduce Chinese market dominance, delegates heard at the Investing in African Mining Indaba conference in Cape Town, South Africa.

"China has pretty much taken the whole market. There has to be a rebalancing of the supply chain," mining and refining firm Eurasian Resources Group's chief executive, Benedikt Sobotka, said. The company expects to produce around 20,000t of cobalt in the Democratic Republic of Congo this year.

"At the moment, it is all about China, which accounts for 70pc of the electric vehicle market, downstream and value adding in the battery materials supply chain," he said. "China — and to a much lesser extent South Korea and Japan — dominate, so regional supply chains have to be created in other parts of the world."

In terms of battery raw materials, China only has large reserves of graphite, but it has developed a comprehensive downstream cathode and anode supply chain through a long-term strategic focus.

The major elements of cathodes for electric vehicle and energy storage batteries are lithium, cobalt, nickel and manganese. Graphite is the major component for anode, while copper plays a much bigger role in electric vehicles and charging infrastructure than in internal combustion engines.

"Original equipment manufacturers will want to have local supply chains," German chemicals firm BASF's catalyst division president, Peter Schuhmacher, said. "There are big efforts in Europe towards achieving this,"

Commodity trading firm Traxys' managing director, Erez Ichilov, said that under-investment across the battery materials supply chain is a serious problem that could lead to bottlenecks.

"A lot more raw materials will be needed by 2030. We want to participate in unclogging the midstream and upstream bottlenecks," he said, referring to a joint venture with resources group Pallinghurst to invest in projects that develop and supply responsibly and ethically sourced materials to the rechargeable battery and energy storage industry.

"Quebec in Canada is becoming a regional centre for battery raw materials supply chain development in North America," he said. "There is no reason why there should not be a hub in Africa."

Ichilov said that Port Elizabeth is a potential hub in South Africa. It is the country's major port for manganese exports, and manganese is a component in NCM — nickel, cobalt, manganese — battery cathode technology. Traxys' third largest office is in Johannesburg, underlining its interest in establishing more supply chain capacity in Africa.

Recycling of battery metals is expected to become a major factor in establishing the supply-demand balance. Several initiatives are under way to build recycling capacity in Australia, Asia and North America.

"Unlike in many other commodity markets, we see primary and secondary battery metals supply evolving in parallel, opening up a lot of opportunities to develop appropriate technologies and methodologies," Ichilov said.

By Angus Macmillan