‘Securing raw material is more important than the price’
Battery giant LG Chem is desperate for EV metals
LG Chem says it is prioritising efforts to secure raw materials
South Korea’s LG Chem, one of the largest chemical companies in the world, has told
Bloomberg it is looking into securing its own raw materials through potential partnerships and investments in mining companies in a bid to establish a self-sufficient supply chain.
It’s a big move and one which could reduce China’s battery dominance.
As it stands, China dominates battery production from the mining and refining of raw materials with estimates out of Benchmark Mineral Intelligence suggesting China has 75% of the world’s cobalt refining capacity and 59% of its lithium processing capacity.
For a company like LG Chem, the parent company of the world’s second largest battery cell maker (LG Energy Solution), to come out and attempt to lock in raw materials supply highlights just how important securing supply chains has become.
As it stands, China dominates battery production from the mining and refining of raw materials with estimates out of Benchmark Mineral Intelligence suggesting China has 75% of the world’s cobalt refining capacity and 59% of its lithium processing capacity.
For a company like LG Chem, the parent company of the world’s second largest battery cell maker (LG Energy Solution), to come out and attempt to lock in raw materials supply highlights just how important securing supply chains has become.
EV sales to jump from 2m in 2020 to 73m per year by 2040
Electric vehicles could make up about half of all new vehicle sales worldwide by 2035, which provides a hint of where future lithium demand will come from.
Goldman Sachs Research forecast that EV sales will jump to 73 million units in 2040, up from about 2 million in 2020.
Developed countries are expected to be at the forefront of this shift, with EVs expected to secure more than 80% of the market.
“We expect the automobile industry to undergo a major transformation between 2020 and 2030, driven by the increasing adoption of vehicle electrification and autonomous driving,” Goldman Sachs equity research strategist Kota Yuzawa said.
“There will be no let-up in the EV industry’s expansion as environmental rules tighten and electrification technologies become more sophisticated. But the sector’s sources of profits will change dramatically.”
Additionally, the market for EV batteries, which account for as much as 40% of the car’s cost, is becoming concentrated with the top five manufacturers accounting for more than 80% of the global market share in 2020.
Efforts to diversify the battery supply chain are also gaining momentum with the US Inflation Reduction Act, which is due to be officially announced in March, expected to give a relative advantage to manufacturers that are pushing ahead with local production in the US for EVs, battery-related products and EV components.
Goldman Sachs adds that tech innovation will be critical for the industry with the EV battery market expected to grow substantially this decade, driven in part by the development of new materials and the introduction of new battery designs.
Powertrain units and thermal management will also become more efficient to reduce power consumption as engineers seek to reduce the weight of EVs.
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BYD to build $1.2bn EV battery plant in central China
BYD, the world’s largest maker of electrified vehicles, plans to invest $1.2 billion to build a new factory for its batteries in China, according to environmental appraisal filings.
FinDreams Technology, the Chinese company’s battery unit, is aiming to build a facility with the capacity to produce 40 gigawatt hours per year of its Blade Battery in the city of Zhengzhou in Henan province, according to environmental filings published on the Zhengzhou government website on Friday seeking public feedback on the project.
A company spokesperson could not immediately comment on the matter when contacted by
Reuters.
BYD’s Blade Battery is a less bulky lithium-iron-phosphate (LFP) battery that its Chairman Wang Chuanfu has said is safer than other alternatives in the market and will not catch fire.
It has been powering BYD’s best-selling battery electric cars such as the Han and Seal sedans that compete with Tesla’s Model 3 in China.
The
South China Morning Post earlier reported BYD’s Zhengzhou battery plant.
mining.com
LG Chem prepares to lock in mineral supplies
www.mining.com/web/lg-chem-prepares-to-lock-in-mineral-supplies/
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Food for thought on the long and winding Road to Manono
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