The deal marks the Korean lithium-ion battery manufacturer’s first contract to forge a direct, long-term deal with an overseas supplier of raw materials used in the production of lithium-ion batteries for electric vehicles.
Under the terms of the agreement, the Korean battery maker will buy annually 12,000 tons in cobalt sulfate and 60,000 tons in nickel sulfate produced in Queensland from Australian Mines starting from 2020.
The supply volume would account for about 90% of the battery maker’s cobalt sulfate purchase to run its battery operations.
The 7- year contract offers the option to extend another six years, ensuring stable supply of up to 13 years.
A person familiar with the matter said that the latest long-term deal will ensure stable supply of key raw material and defend competitiveness in battery-making against fluctuating price of cobalt sulfate.
Cobalt sulfate is a key material that accounts for about 30% of the cost of battery cathode material used in electric vehicles.
Its price has been volatile recently due to concerns in the Democratic Republic of Congo, the world’s largest exporter of the world’s cobalt.