JOHANNESBURG (miningweekly.com) – At least 12 lithium and six cobalt transactions have been closed between downstream manufacturers and mining companies since 2016, signalling a changing trend in procurement strategy.
This, commodity research consultancy Roskill said in a statement on Friday, shows that the lithium-ion (Li-ion) industry has developed rapidly in recent years with the advent of mass-produced electric vehicles, with predictions that the industry’s requirement for lithium and graphite could increase fivefold within the next decade.
Demand for other materials, like nickel and cobalt, are expected to increase ninefold and fourfold, respectively, reflecting changes in the cathode chemistry.
There is now a significant wave of interest in battery raw material supply security, mainly from Asia, to underpin the growth of Li-ion battery production over the next decade, Roskill noted.
“With an increasing amount of Li-ion battery raw material refining and processing centred in China, and it being front-and-centre of Li-ion demand growth, Chinese Li-ion value chain participants have turned to Australia, Africa and South America to secure the feedstock necessary for their downstream requirements,” the consultancy said on Friday.
While some cathode manufacturers, battery makers and even automotive original-equipment manufacturers, closed or tried to close several lithium supply deals in 2017, cobalt- and nickel-related transactions seem to be taking over this year, perhaps with the realisation that future cobalt and nickel supply is not as secure as lithium and graphite supply.
“The recent spree of deals by Korean companies suggests they are now becoming aware, and while Japan has only dabbled to-date, it may be next; meanwhile European automakers have been hot on raw material [reports] but have yet to strike an agreement.”
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