CATL says mining, not refining, is battery making’s big hurdle

Securing supplies of key raw materials has become a priority for the world’s largest manufacturer of electric vehicle batteries.

“Processing is not the bottleneck, but mining is,” Jiang Li, vice president of Contemporary Amperex Technology Co. Ltd., said in a recent interview. “We want to build our cost advantage with our upstream capabilities.”

China has a stranglehold on refining battery minerals, and customers such as Ford Motor Co. have warned in the past that processing is a bigger constraint on the industry than mining. 

But surging prices and uncertainties over supply are now pushing some battery makers to focus investments on extracting minerals. For all of its manufacturing heft, China still relies on imports of ores. To counter that, CATL plans to establish a new mining unit and has tapped Chen Jinghe, the founder of China’s biggest metals miner, as an adviser.

“Technology innovation can help us conquer shortages of metals in the medium to long term. But sometimes we don’t have enough time,” Li said. “The market can change rapidly. We have to face that difficulty, so mining is very important.”

CATL’s current roster of mining investments includes domestic and overseas projects covering lithium, phosphate and cobalt. Its big lithium mine in China’s Jiangxi province, however, has seen disruptions since August. 

That’s contributed to lithium’s wild swings in price. CATL is making advances in batteries that instead use sodium — a globally abundant element — which the company has dubbed an alternative risk management strategy.

“If the price of lithium goes up, then we can make more sodium-ion batteries,” said Li.