Can 'cobalt-free batteries' replace cobalt batteries into the mainstream?

Recently, GEM (002340) announced that in order to cope with the long-term situation of the rapid development of new energy vehicles in the world and the increased demand for cobalt resources, and to ensure the company's strategic demand for cobalt resources in the next ten years, the company and Glencore have a strategic procurement agreement The contract period is extended to December 31, 2029. At the same time, Glencore will supply no less than 137,800 metal tons of cobalt resources (crude cobalt hydroxide raw materials) to the company during the validity period of the contract, as follows: It is understood that in October 2019, GEM and its subsidiaries and Glencore signed a strategic procurement agreement on the procurement of crude cobalt hydroxide intermediates as raw materials for power lithium batteries and the long-term cooperation between the two parties. The original agreement stated that in the next five years (2020-2024), Glencore will supply the company with no less than 61,200 tons of cobalt resources (crude cobalt hydroxide raw materials). Today, the two parties have not only extended the cooperation period, but also more than doubled the number of purchases. At present, new energy vehicles are subverting the pattern of the world's automobile industry. In the future, cobalt resources, one of the key raw materials for vehicle power lithium batteries, will become a global strategic scarce resource. The rapidly developing new energy market has a huge increase in demand for cobalt resources. The data shows that in 2019, the world's proven cobalt ore reserves are about 7 million tons. According to the global mining volume of 140,000 tons in 2019, there is only 50 years of mining surplus left for cobalt. Industry insiders said that there will be a certain shortage of global cobalt supply in the future. By 2024, the global demand for cobalt is 208,000 tons (of which the demand for cobalt for lithium-ion batteries for electric vehicles is 86,000 tons), and the supply is only 200,000 tons, and the shortage has reached nearly 10,000 tons. According to Battery China.com, Glencore is the world's largest supplier of cobalt resources and has a significant impact on the global supply of cobalt resources. GEM's cobalt products and ternary precursor materials have an important impact on the world's new energy market supply, and it is the world's largest free market purchaser of cobalt resources. Grammy said that Glencore has maintained friendly cooperation and supply relations with the company for many years. The extension of the cobalt resource procurement contract with Glencore this time is a strategic cooperation to deepen cobalt resources and the market in the face of the changing competitive landscape of the world today and the booming trend of new energy in the world. The agreement not only provides the long-term guarantee capability of cobalt raw materials for stabilizing the global market share of GEM battery materials, but also is extremely important for resolving the contradiction in the demand for cobalt resources in my country's new energy market. However, it is worth noting that in order to reduce the dependence on cobalt, many car companies and battery companies have been trying to 'free cobalt and less cobalt' in recent years. NCM811 batteries, quaternary batteries, and cobalt-free batteries, various technical routes and concepts have appeared one after another. As early as 2018, Tesla CEO Elon Musk bluntly stated that the cobalt content in Tesla batteries was only 3% at that time, and that 'cobalt-free' will be achieved in the future. And Kenji Tamura, head of Tesla’s supplier Panasonic’s automotive battery business, also said: “We have drastically reduced the use of cobalt and hope to achieve cobalt-free batteries in the near future. Ru0026D is currently in progress.” Sla, in May this year, Honeycomb Energy officially announced two cobalt-free battery products. It is reported that its SOP for cobalt-free batteries is June 2021. In addition, CATL also revealed whether its company has technical reserves related to cobalt batteries. The current research and development is progressing smoothly and it is looking for ways to improve the supply chain. However, the advancement of any technical route will take time. To complete the large-scale replacement of the current ternary battery, this is by no means achievable in a short time. The industry believes that in the next 5 years, the technical path of ternary main lithium iron phosphate supplementary will not change. So, before the 'cobalt-free battery' becomes the mainstream, the industry still cannot do without cobalt.