Jiang Li said, “Processing is not the bottleneck, but mining is.” (Qilai Shen/Bloomberg)
key takeaways:
- CATL is prioritizing mining as it works to secure raw materials for electric vehicle batteries.
- Vice President Jiang Li said that processing is not the bottleneck, but mining is.
- CATL is pursuing sodium-ion batteries as an alternative risk management strategy if lithium prices rise.
Securing supplies of key raw materials has become a priority for the world’s largest maker of electric vehicle batteries.
“Processing is not the bottleneck, but mining is the bottleneck,” Jiang Li, vice president of Contemporary Amperex Technology Co., said in a recent interview. “We want to create our cost advantage with our upstream capabilities.”
China dominates the refining of battery minerals and customers such as Ford Motor Co. have warned in the past that processing is a bigger hurdle for the industry than mining.
But rising prices and supply uncertainties are now prompting some battery makers to focus investment on extracting the mineral. For its entire manufacturing load, China is still dependent on imports of ores. To counter this, CATL plans to set up a mining unit and has hired Chen Jinghe, the founder of China’s largest metal mining company, as a consultant.
“Technology innovation can help us overcome metals shortages in the medium to long term. But sometimes we don’t have enough time,” Li said. “The market can change rapidly. We have to face that difficulty, so mining is very important.”
CATL’s current roster of mining investments includes domestic and overseas projects covering lithium, phosphate and cobalt. However, its large lithium mine in China’s Jiangxi province has been seeing disruptions since August.
This has contributed to wild fluctuations in lithium prices. CATL is making progress on batteries that use sodium – a globally abundant element – in what the company has dubbed an alternative risk management strategy.
“If the price of lithium goes up, we can make more sodium-ion batteries,” Li said.
on the wire
State-backed buyer China Mineral Resources Group Co., seeking more pricing power in some key metals, has told steel mills and traders it plans to embargo some Fortescue Ltd. iron ore stockpiles held at Chinese ports. Iron ore advanced, with futures briefly rising above $100 a ton.
Bloomberg Intelligence said China’s steel surplus is set to decline this year as production lags behind demand. The industry will continue its structural transformation in the second half as the economy shifts from asset creation to high-value manufacturing and green technology.
According to Gavekal Dragonomics, volatility in oil prices could be less consequential for China as it would reduce its dependence on petroleum. A key driver of that change is the rapid electrification of the country’s heavy truck fleet.
