Autumn 2018 newsletter poll results
In our latest poll, 20% of respondents indicated that they think the establishment of a European-based supply chain offers the biggest opportunity for reducing battery cell manufacturing costs within the next five-to-10 years.
Indeed, raw materials contribute significantly to the cost of battery manufacturing. The development of a European-based raw material supply chain is therefore considered critical to strengthening the EU’s position in the global market, as disruption of the supply of raw materials would severely impact the goal of bringing down costs, according to a recent report by the EU Commission, published in November. It notes that the supply of critical raw materials (cobalt, natural graphite and silicon) is “potentially vulnerable to disruption” and that “reducing the EU’s dependency on third-country markets will become increasingly important”.
Although the results do not represent an overwhelming majority, they are interesting as they support the EU Commission’s Battery Action Plan.
So how does a European-based raw material supply chain offer the opportunity to drive down cost?
According to Gavin Montgomery, director of battery raw materials at Wood Mackenzie and speaker in the session Reducing Cobalt Dependency: How Cobalt Availability and Price Is Driving Technology Development in The Battery Industry, on Tuesday 7 May at The Battery Show Conference 2019, “[Asian countries] also need to import metals like lithium, cobalt and nickel from the DRC, Indonesia, and Australia, for example. If Europe can increase production of refined battery metals, as we currently see from the likes of Umicore, Glencore, Nornickel, then it will be able to supply the continent’s aspirant battery factories. Actually, European refineries can be quite competitive with other countries.”
Vincent Ledoux-Pedailles, vice-president for European corporate strategy and business development at Infinity Lithium Corporation, a European-based producer of lithium, points out that it is “cheaper to produce this battery chemical in Spain than in South America or even in China” as these countries have implemented royalties or taxes, which have increased the prices.
Indeed, realising a localised source for battery materials would reduce logistics costs and secure the supply for European-based plants, in addition to meeting the increasingly stringent CO2 requirements set by governments and OEMs alike.
The Battery Show Conference 2019 will feature in-depth discussions on how this could be achieved: