GEM to provide 170kt NCA precursor materials to South Korea’s Ecopro

Chinese battery materials producer GEM has signed a memorandum with South Korea's Ecopro to supply the latter with 170,000 tonnes of nickel-rich nickel-cobalt-aluminium (NCA) precursor materials in the next five years, according to an announcement on Sunday December 23.

Nickel-cobalt-manganese and NCA are the primary materials used to produce lithium-ion batteries for electric vehicles (EVs).

Ecopro plans to procure 16,000 tonnes of NCA precursor materials from Shenzhen Stock Exchange-listed GEM in 2019, then 24,000 tonnes in 2020 and 40,000 tonnes in 2021. The remaining 90,000 tonnes will be split between 2022 and 2023, though the per-year breakdown has yet to be negotiated.

Under the memorandum, GEM will also provide nickel hydroxides – intermediate nickel products extracted via high-pressure acid leaching – to Ecopro and will share the technology for producing nickel sulfate and cobalt sulfate from nickel hydroxides and cobalt hydroxides.

GEM and Ecopro also agreed to accelerate the development of cobalt powder and basic nickel carbonate refineries in South Korea.

The supply agreed within the memorandum between GEM and Ecopro will help the former to establish a core position in the nickel-rich ternary precursor materials market and increase the global market shares for both companies in the nickel-rich NCA materials, GEM said in the announcement.

Optimism regarding EVs sent prices of relevant battery materials including nickel sulfate and cobalt sulfate – key components of NCA lithium-ion batteries – to record highs earlier this year. Prices have been under pressure since then as the market came to realize that large-scale EV adoption won’t materialize in the near term.

Fastmarkets assessed the price for nickel sulfate, China ex-works, at 23,700-24,200 yuan per tonne on December 24, unchanged from a week earlier in a stable market. It was assessed at 26,000-27,500 yuan ($3,774-3,992) per tonne in late July.

Fastmarkets assessed the price for cobalt sulfate, China ex-works, at 65,000-68,000 yuan on December 19. It was assessed at 145,000-150,000 yuan per tonne in mid-April.

Nevertheless, the expected EV battery boom has encouraged battery materials producers such as GEM to stay aggressive in all parts of the supply chain -including in securing raw materials supply and enhancing downstream production – despite volatile prices.

In late September, a joint venture comprising GEM, Tsingshan Group, Brunp Recycling, PT Indonesia Morowali Industrial Park and Hanwa Co, announced it would invest in a nickel-cobalt project in Morowali, Indonesia. The project has a target production of 50,000 tonnes per year of nickel and 4,000 tpy of cobalt. It will be able to produce 50,000 tpy of nickel hydroxide intermediates, 150,000 tpy of battery-grade nickel sulfate and 20,000 tpy of battery-grade cobalt sulfate, according to GEM.

In January 2017, GEM and Ecopro agreed to establish joint ventures in Jingmen, in central China, and in Pohang, South Korea, to produce NCA battery material, aiming to achieve a capacity of at least 10,000 tonnes of NCA ternary precursor material that year.