SEOUL, Mar. 2 (Korea Bizwire) — Local battery makers are rushing to secure a steady supply of cobalt through import diversification and company mergers as the price of the raw material keeps rising, industry sources said Thursday.
The international price of cobalt, a core component of batteries used in smartphones and electric vehicles, jumped to US$82,000 per ton in February from $20,000 in early 2016.
Sources said battery companies with large demand for cobalt, including Samsung SDI, LG Chem and SK Innovation, have started to replace their short-term purchasing contracts with long-term arrangements while seeking new sources of the metallic element.
SK Innovation, for example, signed an off-take agreement last month with metals developer Australian Miners for a seven-year supply of nickel and cobalt.
Some companies are pursuing mergers and acquisitions or strategic partnerships with firms that have the technology to recycle cobalt extracted from the hundreds of thousands of smartphones that are discarded or put on the used market each year.
Unofficial estimates suggest that up to 150 tons of cobalt can be retrieved just from reusing Galaxy Note 7, a phablet from Samsung Electronics that was discontinued soon after release in 2016 due to battery problems.
Another option has been to develop a way to replace cobalt with other materials, such as nickel.
“Interest in recycling natural resources has increased recently from the rising cost of cobalt and the global eco-friendly movement,” an industry official said. “Investment would be possible in recycling companies of the United States, Belgium and other foreign countries, but also in nurturing such firms at home.”
Industry sources say pre-emptive measures are necessary to recycle the material for electric vehicle batteries, which is still at a fledgling level. They say it would take another five to 10 years for the recycling process to pick up, since the electric vehicle market is relatively small, but companies need to start making investments now.