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General Motors Announces a Cobalt Supply Deal for Electric Vehicle Batteries With Mining Company Glencore

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【Summary】General Motors announced today a multi-year cobalt sourcing agreement with Swiss mining company Glencore. The company will supply GM with cobalt to produce electric vehicle batteries from its Murrin Murrin nickel and cobalt mining operations in Australia. Cobalt is a key raw material for electric vehicle batteries and automakers around are entering into supply deals to ensure they have a reliable supply of it for the batteries in their future electric vehicles.

Eric Walz    Apr 12, 2022 7:30 AM PT
General Motors Announces a Cobalt Supply Deal for Electric Vehicle Batteries With Mining Company Glencore

U.S. automaker General Motors announced today a multi-year cobalt sourcing agreement with Swiss mining company Glencore. The company will supply GM with cobalt to produce electric vehicle batteries from its Murrin Murrin nickel and cobalt mining operations in Australia. 

Cobalt is a key raw material for electric vehicle batteries and automakers around are entering into supply deals to ensure they have a reliable supply of cobalt for the batteries in their future electric vehicles.

Glencore is one of the world's largest mining companies with operations in 35 countries. The company is a major producer and marketer of more than 60 responsibly sourced commodities.

"We are delighted to announce this collaboration and support General Motors in delivering its electric vehicle strategy," said Ash Lazenby, Glencore U.S. Cobalt marketer and trader. "Future facing commodities like cobalt play a pivotal role in decarbonizing energy consumption and the electric vehicle revolution."

The cobalt processed from Australia will be used in GM's Ultium batteries, which will power new GM electric vehicles including the Chevrolet Silverado EV, GMC HUMMER EV and Cadillac LYRIQ crossover.

Cobalt is used for lithium-ion battery cathodes to improve energy density and battery life.

The agreement builds on a commitment by both companies to create sustainable raw material supply chains. Both Glencore and General Motors are members of the Responsible Minerals Initiative (RMI), an organization that promotes responsible sourcing of minerals, like cobalt, and nickel, for EV batteries.

"GM and our suppliers are building an EV ecosystem that is focused on sourcing critical raw materials in a secure sustainable manner," said Jeff Morrison, GM vice president, Global Purchasing and Supply Chain. "Importantly, given the critical role of EVs in reducing the carbon footprint of the transportation sector, this agreement is aligned with our approach to responsible sourcing and supply chain management."

GM is Actively Establishing a Reliable Raw Material Supply Chain for EVs

GM has been working to establish a reliable raw material supply chain over the past two years as the automakers transition to electrification.

Last summer, GM announced a strategic investment and commercial collaboration with lithium producer Controlled Thermal Resources (CTR) to secure local and low-cost lithium in Southern California in the Salton Sea region

GM said its investment will help support CTR's more environmentally friendly direct extraction process to recover lithium from geothermal brine. 

This lithium produced for GM by CTR will be a closed-loop, direct extraction process that results in a smaller physical footprint and lower carbon dioxide emissions compared to traditional processes like pit mining or evaporation ponds.

In December, GM announced plans to form a joint venture with South Korean battery materials company POSCO Chemical to build a factory in North America to process battery materials for GM's Ultium electric vehicle platform. The two companies are building a new facility in Quebec, Canada.

The joint venture will process what's called "Cathode Active Material" or CAM, which is a key battery material. CAM represents about 40 percent of the cost of a battery cell, according to GM.

Also in December 2021, GM announced a new partnership with German company Vacuumschmelze (VAC) to build a plant in the U.S. that will manufacture the permanent magnets for the electric motors of GM's future electric vehicles. VAC is a leading manufacturer of magnetic alloys. 

The permanent magnets will be used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado E and more than a dozen other electric models in development that will be built on GM's Ultium EV Platform. 

The new plant would also use locally sourced raw materials, GM said. The finished magnets will be delivered to facilities building EV motors for GM's Ultium-powered EVs. The factory is expected to begin production by 2024.

In Oct 2020, GM announced that it was making a $2 billion investment at its Spring Hill Manufacturing facility to build fully-electric vehicles, including the upcoming Cadillac LYRIQ crossover, the first electric vehicle from GM's luxury division.

A year ago, GM Ultium Cells LLC, the joint venture of LG Energy Solution and GM announced a $2.3 billion investment to build a second EV battery cell manufacturing plant in the U.S. The new facility will be located in Spring Hill, Tennessee and will support GM's future EVs built there. The two companies are also building a $2.3 billion battery plant in Ohio.

GM shared details of its Ultium platform and the batteries for the first time in March 2020

The Ultium batteries are not cylindrical, like the ones Tesla currently uses for all of its vehicles. They are known as "pouch cell" batteries, where the cathode and anode materials are rolled into flat sheets then stacked and enclosed in a flat pouch resembling a big envelope. Cylindrical cells, like the one used by Tesla, are rolled into tightly wound cylinders.

The pouch cell batteries offer several advantages, as they can be stacked on top of each other or side by side when installed in a battery pack, reducing unused space. With their smaller size more pouches can fit into a battery pack, which results in a more powerful and energy dense battery that delivers more range per charge. Pouch cell batteries are also lighter.

The Ultium energy options range from 50 to 200 kWh, the latter powers the GMC Hummer EV, which could enable a GM-estimated range up to 400 miles or more on a full charge with 0 to 60 mph acceleration as low as 3 seconds. 

Ultium-powered EVs are also designed for Level 2 and DC fast charging.

Last week, GM announced it's expanding its partnership with Japan's Honda Motor Co. The two automakers will co-develop new and more affordable electric vehicles in all segments, including passenger cars and SUVs.

As part of the expanded collaboration, the two companies said they will work together to enable the global production of millions of EVs starting in 2027. The partnership will leverage the two companies' strengths in technology, design and supply chains.

The electric vehicle jointly produced by GM and Honda will include popular segments like compact electric crossovers. The compact crossover segment is the largest in the world, with annual volumes of more than 13 million vehicles.

By the end of 2025, GM plans to have capacity to build 1 million electric vehicles in North America. Establishing reliable and sustainable supply chains for raw materials is an important part of that goal.

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