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BMW Group sources sustainable cobalt worth around €100M from Morocco for fifth-gen batteries

Recently the BMW Group signed a cobalt supply contract with Moroccan mining company Managem Group; the contract has a volume of around €100 million, said Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.

Managem is one of the world’s 5 largest producers of high-purity cobalt cathodes. (The cobalt market has four types of cobalt produced: cut cathode; broken cathode; briquettes and powder; ingot and round, according to Sam Wang, trading and product manager for Manatrade AG, the marketing and trading arm of Managem Group.)

Managem’s cobalt activity started in 1930 with its subsidiary CTT, which produced cobalt concentrate from the Bou-Azzer mine, one of the world’s only primary cobalt mines.

With this order the BMW Group will cover about one-fifth of its cobalt needs for the fifth generation of electric drive trains. The company will source the remaining four-fifths of its cobalt needs from Australia. The contract between the BMW Group and the Managem Group is for a term of five years (2020 – 2025). The two companies already signed a memorandum of understanding on the direct purchase of cobalt from Morocco in Marrakesh in January 2019.

Cobalt is an important raw material for electromobility. By signing this supply contract with Managem today, we are continuing to secure our raw material needs for battery cells. We are systematically driving electrification of our vehicle fleet. By 2023, we aim to have 25 electrified models in our line-up—more than half of them fully-electric. Our need for raw materials will increase in line with this. For cobalt alone, we expect our needs to roughly triple by 2025.

—Andreas Wendt

Sustainability and security of supply are important factors for electromobility.

For us, ethically responsible raw material extraction and processing starts at the very beginning of the value chain: We take a keen interest in battery cell supply chains that extends all the way down into the mines themselves.

—Ralf Hattler, Senior Vice President Purchasing Indirect Goods and Services, Raw Material, Production Partner at BMW AG

Compliance with environmental standards and respect for human rights is the top priority. The highest sustainability standards apply to cobalt extraction at the Managem Group.

The BMW Group already publishes the countries of origin for the cobalt it uses on its website (see here). For the fifth generation of battery cells, the company has also restructured its supply chains and will source lithium, as well as cobalt, directly from 2020 and make these raw materials available to its two battery cell manufacturers, CATL and Samsung SDI.

This ensures full transparency over the origin of the raw materials. The BMW Group will also cease to use rare earths in its fifth-generation electric drive trains from 2021 on.

The BMW Group will obtain battery cells for its fifth-generation electric drive trains from CATL (order volume: €7.3 billion, contract period: 2020 to 2031) and Samsung SDI (order volume: €2.9 billion, contract period: 2021 to 2031).

This will secure our long-term need for battery cells. Every cell generation is awarded to the manufacturer with the leading technology and most competitive economic aspects worldwide. This ensures we always have access to the best possible cell technology.

—Andreas Wendt

As e-mobility gains more traction, the focus of CO2 reduction shifts to upstream added value. The BMW Group has therefore reached a contractual agreement with its cell manufacturers that they will only use green power to produce fifth-generation battery cells for the BMW Group. This ensures that the company will save around ten million tonnes of COCO22 over the next decade. Especially, the energy-intensive production of high-voltage batteries is a major and very effective lever for reducing CO2, because up to 40% of a fully-electric vehicle’s emissions come from battery cell production alone.

The BMW Group produces batteries in-house at its plants in Dingolfing (Germany), Spartanburg (USA) and at the BBA plant in Shenyang (China). The BMW Group has also localized battery production in Thailand, where it works with the Dräxlmaier Group.

To access the cell technology that is vital for electromobility, the BMW Group has formed a technology consortium with Swedish battery manufacturer Northvolt and Umicore, a Belgian developer of battery materials. The collaboration will focus on creating an end-to-end sustainable value chain for battery cells in Europe, extending from development to production to recycling. In the face of rapidly growing demand for battery cells, recycling of battery components and extensive reuse of raw materials will be the best way to close the materials loop as far as possible.


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