Chinese cobalt chemicals producer Huayou Cobalt has started building a 50,000 t/yr facility for power battery ternary precursors at Quzhou in the southeast province of Zhejiang.
The project has an investment cost of 1.53bn yuan ($233mn) and construction is scheduled to take two years.
The facility comprises 25,000 t/yr of production capacity for nickel-cobalt-manganese-8 (NCM-8) series precursors, 12,500t /yr for NCM-9 series and 12,500 t/yr for nickel-cobalt-manganese-aluminium (NCMA) precursors. NCM-8 and NCM-9 have 80pc and 90pc of nickel content respectively.
NCMA is a new battery technology that adds aluminum to the high-nickel-content battery, potentially reducing the cobalt use by up to 70pc.
The company is also building a nickel sulphate plant in Quzhou city, which is expected to provide feedstock supplies to the precursor project.
US carmaker GM and South Korean automaker LG Chem are also developing NCMA batteries, which they call Ultium Cell, and have established a joint venture to manufacture the product at a 30GWh plant in Lordstown, Ohio.
Huayou has been actively exploring nickel resources outside of China and is developing a high-grade nickel matte mining project in Indonesia.
The firm produced 13,004t of battery ternary precursors in January-June, up by 95pc from a year earlier. Sales rose by 88pc to 12,745t over the period, despite pressure from the Covid-19 pandemic.
Demand for nickel sulphate from the power battery sector has risen in recent years, particularly from high-nickel-content batteries, following developments in the high-nickel-content power battery industry.
Argus last assessed Chinese nickel sulphate prices at Yn30,000-31,000/t ex-works yesterday, up from Yn27,800-30,000/t ex-works a week earlier, buoyed by tight spot availability. Prices for 99.8pc grade cobalt metal were assessed at Yn258-268/kg ex-works yesterday, unchanged since 26 November. Producers and some trading firms with ample inventories are keen to hold stocks on expectations of higher demand for cobalt feedstock from the power battery sector in the long term.