The Chinese government has called to strengthen the supply of key resources used for making electric vehicle batteries, but stressed that innovation is still needed to reduce reliance on foreign resources. Xin Guobin, Vice Minister of Industry and Information Technology, said that the cost of NEVs remains high while safety, reliability and convenience need further improvement. The Ministry aims to improve the supply of key resources, including lithium, cobalt and nickel, Xin said. “The Minister’s remarks show that China is working to help domestic enterprises withstand fluctuations in the raw materials market for NEVs,” said Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA).
Lu Yan, Director of Industrial Research at battery maker Gotion High-Tech, rebutted market rumors that China will centralize the purchase of key mineral resources for NEVs. “Some domestic raw material suppliers for NEVs are indeed suppressing supplies. The call from authorities demonstrated the nation’s determination to curb this kind of behavior and ensure the security of NEV supplies in the long term,” he said. Since the beginning of this year, the price of battery metals has risen sharply worldwide. Australian lithium and tantalum producer Pilbara Minerals stunned the market when it announced that it had secured an offer of USD2,240 per metric ton for a parcel of lithium-rich spodumene crystal. “It is not only China but also countries worldwide that are scrambling to build bigger reserves of core raw materials, which are key to lowering the high cost of NEVs. To persuade consumers to replace traditional gasoline-fueled cars with NEVs, the latter must be cost-effective,” Cui said. “The high cost of NEVs presents a major bottleneck for any country aiming to achieve faster development in the sector. Acquisitions and investment is one of the ways for domestic companies to effectively guarantee supply,” he added.
Contemporary Amperex Technology (CATL) is reported to be the mystery suitor behind a USD298 million offer for Vancouver-based Millennial. Millennial’s assets also attracted interest from the China Molybdenum Co. The company is reported to be considering joining CATL in the bid. According to the China Non-ferrous Metals Industry Association, nearly 60% of the country’s spodumene crystal has to be imported from abroad to produce lithium salts used in the manufacture of NEV batteries. “Chinese companies should vigorously develop resource-friendly technological innovations like cobalt-free batteries and forefront battery recycling, to reduce their extreme dependence on such resources,” said Lu, as reported by the China Daily.
