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BMW Group signs €540M supply contract with Ganfeng for lithium from mines in Australia

As part of its electromobility expansion, the BMW Group is deepening its existing business relationship with Ganfeng Lithium based in Jiangxi (China). The two companies have signed a 5-year (2020 - 2024) supply contract for the lithium needed as a key raw material for battery cells.

Ganfeng is the world’s third-largest and China’s largest lithium compounds producer and the world’s largest lithium metals producer in terms of production capacity as of 31 December 2017, according to CRU.

The projected order volume totals €540 million. In this way, the BMW Group is securing 100% of its lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries.

Alongside cobalt, lithium is one of the key raw materials for electromobility. With the signing of this contract, we are securing our lithium needs for battery cells. We aim to have 25 electrified models in our line-up by 2023 and more than half will be fully electric. Our need for raw materials will continue to grow accordingly. By 2025, for lithium alone, we expect to need about seven times the amount we do today.

—Dr. Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network

Sustainability and security of supply are important factors in the expansion of electromobility. For the BMW Group’s purchasing experts, ethically responsible raw material extraction and processing begins at the mines themselves.

Sustainability is an important aspect of our corporate strategy and plays a central role in expanding electromobility. We are fully aware of our responsibilities: Lithium and other raw materials must be extracted and processed under ethically responsible conditions.

—Andreas Wendt

Ganfeng extracts lithium by mining hard-rock deposits in Australia under strict sustainability standards.

The BMW Group already publishes the countries of origin of the cobalt it uses on its website. For the upcoming fifth generation of battery cells, the company has also restructured its supply chains and will be sourcing both lithium and cobalt directly from 2020, making the raw materials available to the two battery cell manufacturers, CATL and Samsung SDI. This ensures full transparency over where raw materials come from.

Cobalt will be sourced directly from mines in Australia and Morocco in the future. Supply contracts will ensure the company’s security of supply up to 2025 and beyond.

The BMW Group also recently announced that it is increasing the order volume for battery cells from CATL to €7.3 billion (contract: 2020 to 2031) and also signed a long-term contract worth €2.9 billion with Samsung SDI for its fifth-generation electric drive trains (contract: 2021 to 2031).

Additionally, the BMW Group’s fifth-generation electric drive trains from 2021 on will be produced entirely without using rare earths.

The BMW Group possesses extensive in-house expertise throughout the entire value chain for battery cell technology. In-house battery production takes place at BMW Group Plants Dingolfing (Germany) and Spartanburg (USA), and at the BBA plant in Shenyang (China). The BMW Group has also localized battery production in Thailand and is working with the Dräxlmaier Group in this area.

In mid-November, the company opened its Battery Cell Competence Center in Munich. The aim of the competence center is to advance battery cell technology and introduce it into production processes. The company is investing a total of €200 million in the location, which is set to create up to 200 jobs. The production of battery cell prototypes makes it possible to fully analyze and understand cell value creation processes.

Whether we set up our own standard production of cells at a later date will largely depend on how the supplier market develops.

—Andreas Wendt

The BMW Group has formed a joint technology consortium with Swedish battery manufacturer Northvolt and Umicore, a Belgian developer of battery materials, for the purpose of developing the cell technology crucial to electromobility. The cooperation will focus on creating a complete, sustainable value chain for battery cells in Europe, extending from development and production all the way to recycling. Recycling of battery components plays a decisive role in closing the materials cycle as far as possible and maximizing reuse of raw materials as demand for battery cells grows.


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