MINING INDABA: Panasonic eyes upstream investment in battery raw materials
Published: Wednesday, 06 February 2019
Japan’s Panasonic is considering investing in the upstream part of the battery raw materials industry in order to have better oversight of quality, pricing and supply chain responsibility, a company executive said.
The move has been led by the company’s growing
consumption of raw materials for batteries due to rapid growth
in demand for electric vehicles (EVs), Kazunori Tanaka, general
manager of the group's electronic device materials department,
"The chain is longer, so to understand and control the chain is
not possible. In order to have some more control over the
supply chain, Panasonic has made purchases of raw materials by
itself," he said.
"In the future we intend to go upstream to purchase
intermediates and try to get a more clear picture of the supply
chain. We would like to establish long-term strategic
partnerships with upstream companies," Tanaka added.
The EV expansion "spurred a revolution in the automotive
industry that no one had experienced before," he said on the
sidelines of the 25th Mining Indaba in Cape Town, South
"It is very difficult to predict future actions, but many
people predict that in the future we may face troubles securing
raw materials. We have to carefully consider how to secure raw
materials with a steady price in the future," Tanaka
But this would not include buying a mine.
Ford Motor Co recently said during an interview with
Fastmarkets that it was looking at being more collaborative in
its partnerships in order to source its raw materials needs.
While not in the cards currently, the automaker has not
entirely ruled out eventually owning a mine.
Panasonic makes two main batteries for EVs: cylindrical
lithium-ion batteries, which use a nickel-cobalt-aluminium
chemistry; and prismatic cell batteries, which use a
Tanaka said during a presentation at the event that by 2030
lithium demand for consumption in batteries is forecast to be
around 10 times the level recorded in 2015, with nickel
consumption expected to rise by 20-fold and cobalt demand by
fivefold in the same comparison.
Worries related to the ethical production of cobalt,
particularly in the Democratic Republic of the Congo, have made
the company uneasy about securing supply in an already
competitive market. "Our concern about responsible sourcing is
one of the most important requirements," Tanaka said.
Fastmarkets’ latest price assessment for standard-grade
cobalt was at $18.75-20.35 per lb on Friday February 1,
down by 28.3% from $26.50-28 per lb at the end of December and
a nearly two-year low. The price was last recorded below this
level on February 15, 2017, when it was at $18.85-19.95 per
Persistent selling pressure is
dominating the spot market, with buyers minimizing their
buying activity due to expectations that the metal price will
continue to move lower.
Meanwhile, lithium supply volumes are expanding, and
"constructing a strong relationship with major producers is
important," Tanaka said.
As for nickel, consumption will increase dramatically, he said,
although its use in batteries as a portion of overall
consumption trends is minor.
"Securement of nickel for chemical usage is getting more
difficult, however," Tanaka added.