US carmaker General Motors (NYSE:GM) has inked a multi-year cobalt supply deal with top producer Glencore (LSE:GLEN).
The Anglo-Swiss company would provide GM with the raw material key for electric vehicle (EV) batteries from its Murrin Murrin mine in Australia, according to a joint statement released on April 12.
GM and Glencore did not provide details on volume or pricing for the cobalt supply deal.
Glencore, which produces cobalt from the Democratic Republic of Congo and also as a byproduct in Australia and Canada, has already signed supply agreements with Tesla (NASDAQ:TSLA) and BMW (OTC Pink:BYMOF,ETR:BMW).
The top producer put out a total of 31,300 metric tonnes (MT) of cobalt from its own sources in 2021, forecasting cobalt supply to reach around 48,000 MT in 2022.
GM will use the cobalt in its Ultium battery cathodes. These batteries are used to power electric vehicles such as the Chevrolet Silverado EV, GMC Hummer EV and Cadillac Lyriq.
The move by GM comes as automakers race to secure supply of key raw materials, because shortages might be on the horizon in coming years. GM’s plan by the end of 2025 is to have capacity to build 1 million electric vehicles in North America.
GM’s cobalt deal was not the only one for raw materials this week. On Monday (April 11), Ford also inked a lithium supply with Lake Resources (ASX:LKE), which could see the Australian junior supply the Michigan-based carmaker with lithium from its Kachi project in Argentina.
Prices for cobalt, lithium and nickel, which are essential to EV batteries, continue to rally fueled by the push for a green energy transition, supporting in part a rise in battery costs.
Last week, Tesla’s CEO Elon Musk said on Twitter that the company might need to get into lithium mining and refining directly at scale, unless costs improved.
In 2015, 40 percent of the costs of a lithium ion battery was raw materials. In 2022, they represent 80 percent of costs, according to Benchmark Mineral Intelligence.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Lake Resources is a client of the Investing News Network. This article is not paid-for content.