SHENZHEN-BASED battery firm GEM Co. will supply 170,000 tons of raw materials to South Korean battery maker ECOPRO Co. from 2019 to 2023, its latest effort to win a bigger share of the booming power cell market. GEM signed a memorandum of understanding with ECOPRO to sell 16,000 tons of lithium nickel-cobalt-aluminium oxide (NCA) cathode materials in 2019, the Shenzhen-listed company said. The volume will increase to 24,000 tons in 2020 and 40,000 tons in 2021, GEM said. Prices for the deal were not disclosed. It will separately negotiate with the ECOPRO about further purchase plans for 2022 to 2023. GEM currently has battery raw materials production capacity of 60,000 tons per annum. “We will adjust production capacity based on demands in 2019 to ensure the orders from customers,” said GEM. GEM will also offer nickel hydroxide raw ingredient and share technology of sulphate production from cobalt hydroxide and nickel hydroxide with ECOPRO. The two companies will also work together to build plants for cobalt power and basic nickel carbonate production in South Korea. In another development, sources said that GEM has stopped buying cobalt from Glencore as the price of the battery material crashed below that agreed in a three-year deal between the two companies. GEM said in a March 14 regulatory filing that it would buy 52,800 tons of cobalt from mining and trading giant Glencore between 2018 and 2020. Cobalt prices on the London Metal Exchange have nearly halved to around US$55,000 a ton since late March, when they hit record highs on expected demand growth. Cobalt is crucial for the lithium-ion rechargeable batteries used to power electric vehicles, a growing sector of the auto industry. Global prices tumbled due to a surplus of cobalt in China. The market is expected to struggle for some years to come due to oversupply. (SD-Agencies) |