Chinese battery maker CATL eyeing upstream cobalt investments

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* CATL looks to secure raw material supply for batteries

* Says overtakes rival Byd in terms of Gwh sales

* Spike in cobalt price led company to explore upstream move

By Tom Daly

GUANGZHOU, China, Nov 7 (Reuters) – Chinese battery maker Contemporary Amperex Technology Co Ltd (CATL) is looking into upstream investments in raw materials, mostly cobalt, to ensure stable supply as demand for electric vehicles (EVs) soars, a company executive said on Tuesday.

Hu Guoliang, assistant to CATL’s president and general manager for its global EV product line, told reporters in Guangzhou that one of his colleagues had been assigned the task of coordinating with upstream suppliers.

Asked if the firm was considering upstream investments, Hu said: “We are looking for all ways to collaborate with upstream and downstream, but obviously upstream is more difficult.”

Several Chinese companies along the Chinese EV supply chain, including automaker Great Wall Motor Co, have bought stakes in overseas mines or been linked with such moves this year, amid expectations metal supply will not keep pace with EV demand.

“Actually, my colleague Mr. Huang is right now talking with someone outside,” Hu said on the sidelines of an industry conference, declining to specify which countries were being considered. “He is in contact with a lot of upstream resources.”

Asked which raw material supplies CATL was most keen to secure, Hu said: “It’s mainly cobalt, for sure, because that’s the most painful part,” referring to a spike in prices for the metal, used in battery cathodes, so far this year.

Delegates had earlier said China needed to ease its reliance on the Democratic Republic of Congo, the world’s biggest cobalt producer, to shore up a steady supply of the metal.

“The only problem is the upstream is so strong. It’s not in our hands,” Hu said, adding that there might have to be more than one set of negotiations to reach any agreement.

Hu had earlier said his company was considering reducing its exposure to cobalt, the price of which has risen by 84 percent year to date to $60,250 a tonne on the London Metal Exchange, by changing the chemistry in its cathodes.

This would involve using less cobalt and opting for a higher nickel content, he said, adding CATL had also invested in a recycling firm.

Hu also said CATL had overtaken its Chinese rival, Byd Co , in sales in May or June this year.

“Based on official data we are No. 1 already in terms of gigawatt hours,” he said, adding that the firm had sold more than 5 gigawatt hours in the first half. (Reporting by Tom Daly; Editing by David Evans and Edmund Blair)