Glencore & Samsung SDI sign five-year cobalt contract
Glencore and Samsung SDI have now signed a contract to supply Samsung with cobalt between 2021 to 2024. The contract covers an amount of 21,000 tonnes of cobalt from the Democratic Republic of Congo.
Neither the Swiss mining company nor the South Korean battery manufacturer Samsung released financial details of the deal. Still, both companies said they are committed to adhering to ethical guidelines for sourcing the finite material in Congo. Glencore’s operations in Congo will be independently audited against the “Cobalt Refinery Supply Chain Due Diligence Standard” defined by the Responsible Mining Initiative (RMI).
Glencore produced 46,300 tonnes of cobalt in 2019 but only expects to mine 29,000 tonnes in 2020 after recently closing their Mutanda mine in the Democratic Republic of Congo. 60% of the world’s cobalt supply comes from the DRC. Prices have dropped dramatically in the cobalt market due to oversupply, pushing prices down from $95,000 a tonne in 2018 to the current price of $34,000.
Glencore also supplies SK Innovation, the South Korean battery cell manufacturer. The two companies have a six-year contract for the purchase of up to 30,000 tonnes of cobalt. The deal should enable the supply of batteries for three million electric cars. Glencore also supplies BMW, but apparently from their Australian mine. Glencore also supplies GEM with cobalt, as well as Umicore. That being said, Umicore and Audi aim to recycle 90 per cent of the cobalt and nickel used in e-Tron batteries, for example.
In 2018, BMW, BASF, Samsung SDI and Samsung Electronics launched a cooperative pilot project to support sustainable and fair cobalt mining initiatives in the Democratic Republic of Congo. A year later in September 2019, these companies launched ‘Cobalt for Development’, a cross-industry initiative to promote responsible cobalt mining in micro-mining in the Democratic Republic of Congo.
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