Petroleum refining company SK Innovation has signed a six-year agreement with global mining and commodities trader Glencore for up to 30 000 t of cobalt contained in hydroxide between 2020 and 2025.
SK Innovation on Wednesday said it had secured the supply of a metal core to battery production and which is in short supply. The company said it “stands ready” to produce the batteries required to meet the significant anticipated battery demand.
The electric vehicle (EV) battery market is growing fast, with total market size expected to be about $150-billion in 2025, larger than the semiconductor market. Accordingly, cobalt demand will keep increasing, SK Innovation said, adding that this was assuming global cobalt demand for EV batteries will be 32 000 t in 2020 and 92 000 t in 2025.
With this contract, SK Innovation can produce batteries for three-million EVs.
The cobalt in this supply contract will be sourced from Glencore’s industrial mining operations in the Democratic Republic of Congo (DRC).
Both parties have agreed that Glencore’s DRC operations would be independently audited each year against the Cobalt Refinery Supply Chain Due Diligence Standard – a standard defined by the Responsible Mining Initiative.
Glencore head of copper and cobalt marketing Nico Paraskevas said the newly established partnership demonstrates the continuation of Glencore’s cobalt hydroxide marketing strategy to secure long-term supply agreements with key players in the lithium-ion battery supply chain.
“This illustrates Glencore’s important role in supplying the materials that enable the energy and mobility transition and Glencore’s commitment to responsible production,” he said.