Auto Manufacturers and Miners Flirt with New Relationships for an EV Future

The EV future ever creeps closer and so does its material impact. The auto industry will have to rely on the mining industry to provide the lithium, cobalt, nickel, and other materials needed for the batteries powering EVs.


Precious Metals - 20 Aug 2021


Gold US $1,787/oz
Silver US $23.27/oz
Platinum US $985/oz
Palladium US $2,339/oz

*prices before market open Aug. 20, 2021

Base Metals - 20 Aug 2021


Copper US $9,973/t
Aluminum US $2,557/t
Nickel US $18,575/t
Zinc US $2,960/t
Lead US $2,252/t
Tin US $32,385/t

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Auto Manufacturers and Miners Flirt with New Relationships for an EV Future

The EV future ever creeps closer and so does its material impact. The auto industry will have to rely on the mining industry to provide the lithium, cobalt, nickel, and other materials needed for the batteries powering EVs. 

The auto industry is in the early stages of forming new relationships with miners in order to secure the materials for its supply chains.

But what do these relationships look like?   

Metal and minerals trading firm Glencore bought a stake in Britishvolt, the U.K. startup that plans to build the country’s first large-scale battery factory for electric vehicles.  

Volkswagen and Northvolt have created a 50/50 joint venture to build a factory for lithium-ion batteries in Germany. BWM has agreed to the principles of ethical mining and sourcing of materials by signing the Initiative for Responsible Mining Assurance “IRMA”. 

Jeep-maker Stellantis is in talks with two companies on securing lithium. France-based Renault has already signed an offtake deal with Vulcan Energy Resources, which plans to process lithium from subsurface geothermal brines in the Upper Rhine valley of southwestern Germany. 

General Motors is partnering with a lithium and power development company near California’s Salton Sea geothermal field. GM will have the rights on lithium produced by the first stage of the project, including an option for a multi-year relationship.

Tesla last month signed a deal with BHP for the nickel from its Western Australian mine after Elon Musk tweeted concerns about supply due to challenges sourcing the metal in a sustainable manner.

The EV maker also agreed to a cobalt agreement with Glencore in June and inked a deal in late March to fund a nickel-mining venture in New Caledonia.

Automaker Ford partnered in 2019 with IBM, South Korean battery maker LG Chem and Huayou to trace cobalt in a sourcing scenario. Ford is planning to launch at least nine all-electric cars and crossovers and at least three electric trucks, vans and SUVs.

This is just a small sample of the deals happening between battery makers, auto manufacturers, and miners. 

Automobile manufacturers have done everything except for the actual mining of the materials they need, but the EV future bodes a future of closer relationships to secure the raw materials needed for their supply chains as demand increases. 

According to the IEA, only 1% of global vehicles on the road were electric in 2020. However, this is a huge increase from 2010 and the supply of the necessary metals is already feeling the pressure. 

Roskill's analysts estimate lithium carbonate equivalent demand will rise above two million tonnes by 2030, more than 4.5 times from 2020. Analysts at Roskill forecast cobalt demand will rise to 270,000 tonnes by 2030 from 141,000 in 2020. 

According to one study published in Nature, in a lithium-nickel-cobalt-manganese oxide battery scenario, demand is estimated to increase by factors of 18 to 20 for lithium, 17 to 19 for cobalt, 28 to 31 for nickel, and 15 to 20 for most other materials from 2020 to 2050, requiring a dramatic expansion of lithium, cobalt, and nickel supply chains and additional resource discovery. 

Miner’s problems such as ethical sourcing, supply constraints, and resource discovery could become auto manufacturer problems.

These new relationships are still in the early stages but they will grow and change as adoption of EVs and the metals needed to build them increase.

Prospector Portal has 136 lithium and 131 cobalt technical reports. 

 

 
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