GM Secures Itself Some Cobalt
Automotive manufacturers are currently on a quest to secure supply chains to avoid any future embarrassments relating to absent materials or missing components. If the last few years have taught the industry anything, it's that it is always better not to get caught with your pants down. So we're now seeing most of the major players trying to lock down raw materials necessary for battery production as they pitch upward in value in anticipation of numerous firms transitioning to all-electric vehicles.
Cobalt has been of particular interest to automakers and General Motors recently entered into a formal agreement to purchase the chemical element from the Anglo-Swiss commodities trader Glencore Plc.
On Tuesday, GM confirmed a multiyear contract to receive materials from Glencore's Murrin Murrin mine in Australia and the cobalt will ultimately find its way inside the automaker's Ultium batteries. This will help the company secure the necessary raw materials for EVs while also giving investors something to gnaw on.
In a bid to sweeten the pot, GM made sure to mention that both companies were part of the Responsible Minerals Initiative (RMI) that exists to make huge industrial projects appear environmentally friendly and compliant with government regulations, including when the materials are sourced from controversial regions where human rights are an issue. This process includes assessments of sustainable regulations that are in place for processing materials and RMI's promise that it will be a net-zero total emissions organization by 2050.
It's also one of the largest global diversified natural resource companies on the planet, which is probably more relevant to General Motors' needs.
"GM and our suppliers are building an EV ecosystem that is focused on sourcing critical raw materials in a secure sustainable manner," stated Jeff Morrison, General Motors 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."
The company's Ultium platform currently underpins the Cadillac Lyriq and Hummer EV and will be used for a whole host of electrified vehicles GM intends to launch next year. It also wants to have the capacity to build 1 million EVs for North America by the end of 2025, which will require reliable access to cobalt and other elements relevant to battery production.
That's going to require a new factory, which the automaker said it would build in Bécancour, Quebec, in conjunction with South Korea's POSCO Chemical. GM announced the planned facility earlier in the month, saying it would be essential for getting cathode active materials down to Michigan where it's been setting up battery plants. However, none of that will be possible if it doesn't have reliable access to raw materials.
"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. Glencore is already a leading producer, recycler and supplier of these commodities, which underpin our own ambition of achieving net zero total emissions by 2050."
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