Germany’s BASF and Russia’s Norilsk Nickel (Nornickel) have signed a nickel and cobalt supply deal to address growing demand for batteries to power electric vehicles, they said on Monday, Reuters reports.
The agreement between BASF and Nornickel, the world’s second largest nickel producer and a major cobalt maker, highlights the burgeoning market for metals needed for battery production.
It could also provide fresh impetus to European efforts to create local battery cell manufacturing capacity - a market that is so far dominated by Chinese and Korean firms.
Part of the deal is a long-term supply agreement for nickel and cobalt feedstocks, while BASF will build a plant to produce battery materials in Harjavalta, Finland, adjacent to a nickel and cobalt refinery owned by Nornickel.
Cobalt is a key ingredient in the batteries that power electric vehicles.
The move is part of BASF’s plan to invest up to 400 million euro ($462 million) as a first step in building production plants for cathode materials in Europe, which are key for storing electric energy in lithium ion batteries.
“With the investment in Harjavalta, BASF will be present in all major regions with local production and increased customer proximity further supporting the rapidly growing electric vehicle market,” said Kenneth Lane, president of BASF’s Catalysts division.
Start-up of the Harjavalta plant, which will be able to supply the materials for batteries for about 300,000 electric vehicles a year, is planned for late 2020.
“The agreement is an important element of Nornickel’s broader strategy to expand its presence in the global battery materials market and establish long-term cooperation with leading producers of cathode active materials,” said Sergey Batekhin, senior vice president at Nornickel.