SK Innovation to secure significant volume of cobalt in long-term supply deal with Glencore
Baar, 4 December 2019
SK Innovation has today signed a six year agreement with Glencore for up to c.30,000 tonnes of cobalt contained in hydroxide between 2020 and 2025.
SK Innovation commented:
“In signing this contract with the world’s largest producer of cobalt, SK Innovation has secured supply of a metal which is both core to battery production and in short supply. SK Innovation stands ready to produce the batteries required to meet the significant anticipated battery demand.
The electric vehicle (EV) battery market is growing fast and the total market size will be c.US$150bn in 2025, larger than the semiconductor market. Accordingly, cobalt demand will keep increasing. We assume global cobalt demand for EV batteries will be 32kt in 2020 and 92kt in 2025. With this contract, SK Innovation can produce batteries for 3 million EVs.
Glencore and SK Innovation are committed to ensuring ethical and responsible production and procurement of cobalt. There are continuous allegations of human rights abuses linked to cobalt production, and SK Innovation is voluntarily focusing on ethical and responsible sourcing. The cobalt in this supply contract will be sourced from Glencore’s industrial mining operations located in the DRC. Both parties agree that the DRC operations will be independently audited each year against the “Cobalt Refinery Supply Chain Due Diligence Standard”. This standard is defined by the Responsible Minerals Initiative.
Amid growing battery demand, SK Innovation will do its utmost to ensure stable raw material supply while fulfilling its ethical responsibilities.”
Nico Paraskevas, Head of Copper & Cobalt Marketing, Glencore, commented:
“We are pleased to enter into this long-term cobalt supply agreement with SK Innovation.
This newly established partnership demonstrates the continuation of Glencore’s cobalt hydroxide marketing strategy to secure long term supply agreements with key players in the lithium-ion battery supply chain. This illustrates Glencore’s important role in supplying the materials that enable the energy and mobility transition and Glencore’s commitment to responsible production.”
For further information please contact:
t: +41 41 709 2880
m: +41 79 737 5642
t: +41 41 709 2462
m: +41 79 904 3320
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
About SK Innovation
SK Innovation, which represents SK Group in the energy and chemicals business, has operations in the oil refining, chemicals, lubricants, E&P, batteries, and materials sectors.
SK Innovation has been striving to expand its business through its success in developing, manufacturing, and selling medium- and large-sized batteries installable in electric automobiles.
Based on such high-energy density and high-capacity technologies, SK Innovation has already secured as its clients global carmakers.
Moreover, once its Changzhou plant starts operation in January 2020 along with the other plants in China, Hungary, and the US, SK Innovation is expected to accelerate its rapid growth.
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities. The Group's operations comprise around 150 mining and metallurgical sites and oil production assets.
With a strong footprint in both established and emerging regions for natural resources, Glencore's industrial and marketing activities are supported by a global network of offices located in over 35 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 158,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.