Russia’s invasion of Ukraine threatens to increase costs for Europe’s vehicle industry, which is already struggling with record high lithium prices and a shortage of semiconductor chips, according to Benchmark Mineral Intelligence.
Prices for nickel, a key battery material, rose to their highest levels since 2011 this week following Russian president Vladimir Putin’s decision to send troops into Ukraine. Oil prices rose to a seven-year high above $100 a barrel, while palladium, used in catalytic converters, also hit a seven-month high.
Russia’s largest miner Nornickel produces around 20% of the world’s supplies of high purity class 1 nickel, which is used in electric vehicle batteries.
As Europe is looking to build out a local supply chain, with locally sourced raw materials, this is a big headache for European automakers and cell producers.—Greg Miller, an analyst at Benchmark
US President Joe Biden signalled his support for domestic mining projects this week, as long as they benefit local communities and tribal groups. The Department of Defense said it had awarded miner MP Materials $35 million to process heavy rare earths at its Mountain Pass mine in California. (Earlier post.)