The deal, which is set to start in 2020, will see Umicore supply close to 80,000 metric tonnes of NCM material to Samsung SDI.
The deal, which is set to start in 2020, will see Belgium-based Umicore supply close to 80,000 metric tonnes of NCM material, with the majority of volume coming from its plant in Korea.
Samsung SDI will use the cathode materials for automotive applications and energy storage systems.
Umicore stresses in the press release that the deal offers critical predictability and visibility along the electric vehicle (EV) supply chain.
“(The agreement) underscores that a sustainable battery value chain is taking shape and demonstrates the commitment of key industry players to support the growing penetration of EVs globally,” Marc Grynberg, CEO of Umicore, said.
Transparency in raw materials supply chains continues to be under the spotlight in the battery metals space, in particular for cobalt. Most cobalt, a key element in the lithium-ion batteries used to power electric cars, is mined in the Democratic Republic of Congo, where mining has often been linked to child labor and human right abuses.
“Responsible sourcing remains a key topic in the industry. Undertaking the correct due diligence to ensure the material you source is sustainable is absolutely paramount to automakers,” Benchmark Mineral Intelligence Senior Analyst Caspar Rawles told the Investing News Network recently.
The Belgian battery materials producer will provide LG Chem’s facilities with a total volume of 125,000 metric tonnes of material for battery output out of Umicore’s plants in Poland, Korea and China.
Most of the cathode material for LG Chem’s batteries will come from Umicore’s new cathode plant in Poland, which is due to start production in late 2020. The company is set to invest US$370 million in the manufacturing facility as the EU continues to push for the development of batteries in the region.
Umicore, which is Europe’s largest producer of battery materials for the EV industry, has also acquired the Finland-based Kokkola cobalt refining and cathode precursor operation from a subsidiary of Freeport-McMoRan (NYSE:FCX) for US$150 million.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.