Glencore to supply SK Innovation with 30,000 tonnes of cobalt


SK Innovation, the South Korean battery cell manufacturer, has signed a six-year contract with Glencore for the purchase of up to 30,000 tonnes of cobalt. The deal is intended to enable the supply of batteries for three million electric cars.

The contractually fixed supply volume relates to the period from 2020 to 2025, although nothing has been revealed about the purchase price. SK Innovation has stated that the signing of the contract ensures the supply of the scarce metal that is of central importance for battery production. The South Korean company assumes that the market for electric vehicles, and thus the demand for cobalt will grow sharply shortly. SK Innovation, South Korea’s biggest oil refiner and more recently one of the world’s largest supplier of electric vehicle batteries, estimates that around 32,000 tons will be required by 2020 and approximately 92,000 tons of cobalt will be in demand by 2025 for this purpose.

The cobalt destined for SK Innovation is extracted from Glencore industrial mining in the Democratic Republic of Congo. Against this background, both partners have agreed that the support measures to ensure ethical standards will be independently audited every year according to the “Cobalt Refinery Supply Chain Due Diligence Standard”. The Responsible Mining Initiative has defined the standards controlled in this process.

Glencore will also supply the Belgian materials technology and recycling group Umicore with cobalt from its Congolese mining sites. An agreement to this effect was concluded in May. Apart from that, however, this year has been anything but optimal for Glencore. The Swiss company’s share price recently fell by 19 per cent. This was partly due to the falling price of cobalt, which prompted Glencore to reduce the production of the battery metal. While one ton of the raw material was still worth 95,000 dollars in May 2018, now the same amount is going for 35,000 dollars. Industry experts assume that demand will recover as soon as more electric vehicles come onto the market.

Meanwhile, SK Innovation continues to try to hold its own in the competitive battery market. In the fierce legal dispute between the company and its rival LG Chem in the USA, US court cases examined by Reuters show that the two South Korean battery manufacturers are trying to discourage each other from importing and selling batteries intended for VW, GM, Ford, Jaguar, Audi and Kia electric SUVs. In one of the lawsuits, LG Chem claims that SK Innovation won the contract to supply batteries for Volkswagen’s MEB electric vehicle architecture only because employees poached from LG Chem are said to have disclosed their trade secrets.,


about „Glencore to supply SK Innovation with 30,000 tonnes of cobalt“

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