Cobalt: GEM and Glencore sign five-year supply deal

GEM has agreed to purchase 61.2kt of cobalt from Glencore between 2020 and 2024, accepting 13.2kt of cobalt hydroxide in 2020 and 12kt in each of the following four years. The deal secures a significant amount of feedstock for GEM, which produces cobalt from recycling and from imported intermediates. The company is a major producer of cobalt fine powder and tungsten carbide. It also produces various cobalt chemicals including tetroxide, sulphate, and chloride as well as lithium-ion battery precursor and cathode materials at its four main manufacturing facilities in the cities of Jingmen, Taixing, Wuxi and Yuyao in China.

The deal is notable as a previous deal between the two parties, in March 2018, fell apart. GEM was to purchase 13.8kt of cobalt contained in hydroxide from Glencore in 2018, followed by 18kt in 2019 and 21kt in 2020; however, the supply contract was subsequently renegotiated due to sharp decline in the cobalt price.

The new deal helps clarify how GEM’s upstream supply chain is likely to look over the coming years. Glencore and secondary feed will account for the bulk of cobalt supply and the company recently announced plans to build a new manufacturing and recycling plant in Ningde, China with Tsingshan Group and local Government partners. GEM has also partnered with CATL, Tsingshan, Hanwa and IMIP on a nickel and cobalt sulphate project in Indonesia.

Downstream, GEM has signed several supply contracts with customers including ECOPRO (NCA), Ronbay Technology (NCM), Brunp/CATL (NCM) and Xiamen Tungsten (NCM).

Roskill’s NEW Cobalt: Outlook to 2029 report was published in August 2019. Click here to download the brochure and sample pages or to access further information.

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This article was written by Jack Bedder. Please get in touch below if you wish to discuss further:

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