Switzerland-based mining company Glencore has reportedly signed a deal to supply cobalt materials to a Chinese lithium battery manufacturer – who would in turn sell batteries for Volkswagen’s (VW) electric vehicles.
According to Reuters, the deal would see Glencore sell up to 20,000 tonnes of cobalt products to CATL (Contemporary Amperex Technology Co Ltd), a China-based battery giant who also supplies EV batteries to carmaker BMW.
“It was a triangular deal where Glencore, CATL and VW got round the table,“ Reuters quoted a cobalt-trading source as saying. “CATL on their own weren’t willing to commit to such a large quantity so VW said they would buy the batteries (from CATL).“
The contract to supply cobalt hydroxide and alloys, the sources said, was based on cobalt metal prices which at the time were around $28,500 a tonne on the London Metal Exchange CBD3. They have since more than doubled to above $58,000 a tonne.
Glencore declined a request by BBB to comment on the report.
According to Reuters, a spokesperson for VW’s operations in China said: “There is no guarantee from the VW group to anyone.”
“CATL is among the suppliers VW is currently talking to,” the VW source said. “We are not commenting on our business relations.“
Meanwhile, Ulrich Eichhorn, head of R&D for the VW Group, told Automotive News: “We will need more than 200 gigawatt-hours“ by 2025 – a battery capacity that is “equivalent to 40 Tesla gigafactories”.
VW has said in the last year that it intends to launch more than 30 pure EVs over the next 10 years. The group forecasts that its own pure EV sales will be between two and three million units in 2025, equivalent to some 20% to 25% of the total unit sales expected at that time.
The EV trend has also been adopted by Chinese-owned and Sweden-based automotive maker, Volvo, which said recently all of its vehicles made after 2019 will be electric or hybrid.
