Prices spiked further after Western countries slapped sanctions on Russia, a major global supplier of nickel and cobalt, for invading Ukraine in late February.
Several major automakers in China, looking to lock in battery material supplies and control production costs for EVs, have moved quickly in the past two months to establish partnerships with local raw material producers through direct investments or joint ventures.
State-owned SAIC Motor Corp. in February inked a deal with Chinese nickel supplier Tsingshan Group. Under the agreement, the automaker will invest in Tsingshan’s battery unit and collaborate to develop nickel, cobalt, lithium and manganese resources in and outside of China.
It will become the largest outside investor in the Tsingshan unit, SAIC said, without disclosing the amount of its investment.
Volkswagen Group, which produces vehicles at joint ventures with SAIC and China FAW Group Corp., on March 21 signed memorandums of understanding with Tsingshan and Chinese cobalt producer Huayou Cobalt.
The three companies will form a joint venture in Indonesia, a country with rich laterite nickel ore reserves. The partnership will produce cobalt and nickel materials to support EV battery output of 160 gigawatt hours, VW Group China said.
In addition, VW Group China will create a separate joint venture with Huayou in the south China region of Guangxi to refine nickel and cobalt sulfates.