Roskill reports that China-based cathode producer XTC New Energy Materials, a unit of Xiamen Tungsten, signed a supply agreement with Jingmen GEM, a subsidiary of GEM. Under this agreement, Jingmen GEM will supply 5-15 ktpy of cobalt tetroxide and 15-35 ktpy of lithium nickel cobalt manganese oxide (NCM) precursor materials to XTC New Energy Materials until the end of 2023.
The two companies also committed to build long-term strategic partnerships covering mineral resources development, procurement and sales, product processing, and information sharing.
Roskill noted that this is the second long-term precursor supply XTC New Energy Materials has secured this year. In September, XTC signed a similar agreement with CNGR, China’s leading precursor supplier. CNGR will supply 20-25 ktpy of cobalt tetroxide and 15-35 ktpy of lithium nickel cobalt manganese oxide (NCM) precursor materials to XTC New Energy Materials until the end of 2023.
XTC New Energy Materials now has an existing cathode capacity of around 60 ktpy; the company plans to increase capacity to 260 ktpy in the long-term. This will come from the addition of a new 40 ktpy NCM project under construction and 160 ktpy NCM+LFP project newly invested in Yaan, Sichuan.
The precursor supply agreements signed successively with China’s leading precursor manufacturers CNGR and GEM will secure XTC’s precursor supply as it looks to expand its cathode capacity at a rapid pace.
Roskill believes the supply agreement with GEM on cobalt tetroxide and NCM precursors materials will allow XTC to strengthen its supply chain and create greater resilience for cathode materials production. Importantly, the collaboration with GEM, the world’s leading ternary precursor materials provider, on product processing as well as procurement and sales would put XTC in a good position to develop new cathode products and optimize cost structure, Roskill noted.
It is also noted that mineral resources development is a key component of the long-term strategic partnerships between XTC and GEM. Roskill believes this is expected to create synergies for both companies in terms of securing key raw materials supply.
Driven by the strong downstream demand, key players throughout the lithium-ion battery supply chain have been striving to gain control over the supply of battery raw materials—particularly important for precursor and cathode manufacturers.