Panasonic eyes upstream investments to secure battery raw materials

05 Feb 2019

Cape Town — In a bid to create more certainty in its raw material supply chain for battery metals, Japan's Panasonic is considering investing in upstream sectors to secure supply and hedge against volatile costs.


Speaking to S&P Global Platts on the sidelines of the Mining Indaba conference in Cape Town, Kazunori Tanaka, general manager electronic device materials, said Panasonic was looking at various upstream investments, but not directly buying a mine.

That could come in the form of offtake agreements, especially for critical materials such as cobalt and nickel, he said.

Echoing that sentiment was Yoshihiro Seki, state minister at Japan's Ministry of Economy Trade and Industry, who said securing cobalt supply was essential for the future of the electric vehicle market.

Cobalt, and its related supply-side risks with the bulk of metal coming out of Congo, was a hot topic both on and off stage at Indaba.

A variety of sources said that even though battery producers, buoyed by increasing pressure from OEMs (original equipment manufacturers) and automakers concerned with price volatility, were using technology to reduce cobalt content in EV batteries, the market's fast growth meant that even though less is being used per unit, the number of units meant ever more cobalt was required.

Panasonic's Tanaka said another major reason for investing upstream was to have a better handle on where the metal was originating from.

The reputational risk to major brands such as Panasonic were huge should it be discovered metal has come from dubious origin, including the use of child labor.

Ted Miller, head of energy storage strategy and research at Ford agreed, saying consumers were buying directly into brands such as Ford and any controversy could be massively damaging.

One analyst said automakers operated on slim margins in an increasingly competitive world and, as such, reputation and brand recognition was everything, especially following the fallout from the recent "diesel-gate" scandal.