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Glencore Plc, the world’s top cobalt producer, agreed to sell about a third of its output of the metal to Chinese supplier of battery chemicals GEM Co., the Shenzhen-listed company said in a filing.
The three-year deal is set to shake the car industry as the biggest brands rush to lock down battery supplies essential to their survival in the coming electric-vehicle era. It also bolsters China’s dominance in the battery industry, coming a day after Volkswagen AG signed $25bn of contracts with three of the biggest Chinese and Korean producers.
“It tells us once again that it is China rather than the western world who properly understands the raw material requirements and value of global vehicle electrification,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said in a note. "They clearly get it; the West doesn’t seem to at the moment.”
China’s drive to secure other raw materials for batteries was also seen last week as an Australian producer said giant manufacturer Shaanxi J&R Optimum Energy Co. had begun takeover talks to control one of the world’s newest lithium mines.
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