(ATF) A subsidiary of China’s largest electric vehicle battery maker Contemporary Amperex Technology Co Ltd (CATL) will take a $137.5-million stake in the Kisanfu copper-cobalt mine in the Democratic Republic of Congo in a bid to secure supplies for its EV batteries.
Under a strategic partnership agreement, Ningbo Brunp CATL New Energy Co will buy a 25% stake in China Molybdenum unit KFM Holding Ltd, which holds 95% of the Kisanfu mine, CATL said in a statement on Sunday on its official WeChat channel.
“The lithium battery industry is entering a Terawatt Hour era, and securing stable and compliant supplies of raw materials is key to ensuring high-quality delivery... Moly is a leading supplier of battery metal and electric vehicle raw materials that complies with international ESG (environmental, social, and governance) standards,” Zeng Yuqun, chairman of CATL said in the statement.
The investment gives CATL access to one of the world’s largest undeveloped sources of cobalt, an expensive metal in EV batteries. Cobalt prices are up more than 50% this year on surging EV demand and concerns of a supply squeeze.
Kisanfu, located near Moly’s giant Tenke Fungurume copper-cobalt mine in the DRC, a country that accounts for nearly two-thirds of global cobalt supply, contains an estimated 3.1 million tonnes of cobalt metal, as well as 6.2 million tonnes of copper.
CATL has already invested in companies mining other battery metals such as lithium and nickel in a bid to secure supply.
Moly, which bought its stake in Kisanfu in December, said in a separate statement it and CATL “will fund the project capex in proportion to their ownership in KFM to jointly build a world-class copper and cobalt producer.”
Long-term cobalt supplier
The partnership sees Moly become “a long-term cobalt supplier to the world’s largest power battery manufacturer,” it added.
A broad strategic partnership between the two companies will see them cooperate in nickel, including in Indonesia where they both have projects, as well as in global acquisitions, investments and development of lithium, Moly’s statement said.
Shares of CATL and Moly were both up more than 2% during the first trading hour on Monday, but declined later and closed with 0.96% and 1.25% daily increase, respectively.
In May of last year, Reuters reported that CATL and its customer Tesla were jointly developing batteries that use little-to-no cobalt after activists claimed that the mining of the material in DRC has involved child labour and has wrecked the environment.
But just a month later, Tesla secured a new cobalt deal with Swiss mining group Glencore, which owns the largest cobalt mine in DRC.
In February, CATL responded to an investor inquiry saying that the company was developing “cobalt-free” batteries and the project was proceeding smoothly. “We’re working on building the supply chain for the brand new and breakthrough product,” the company said.
The cobalt deals indicate that both Tesla and CATL still need large volumes of the mineral from the DRC going forward.
With reporting from Reuters