BMW orders cobalt from Morocco for €100M
The BMW Group has signed a supply contract with the Moroccan
mining company Managem Group for cobalt for use in battery cells worth around
100 million euros. According to the German carmaker, this five-year contract
covers around one-fifth of the cobalt requirements.
The two companies already signed a memorandum of
understanding regarding the direct purchase of cobalt from Morocco in Marrakesh
in January 2019. BMW will use the cobalt to supply the battery cells for
electric cars using the company’s fifth-generation electric drives. The first
of these vehicles to be launched on the market this year is the iX3. BMW will
obtain the remaining four-fifths of the cobalt it needs from Australia as well
as lithium.
BMW announced in October 2019 that it was changing its
strategy for purchasing raw materials for battery materials. The car
manufacturer will buy cobalt and lithium, for example, from the mine operators
themselves and then make it available to cell manufacturers (currently CATL and
Samsung SDI) to build battery cells for BMW. This is supposed to eliminate
suppliers and go-betweens from the supply chain, and the German company hopes
that it will provide greater control and greater transparency. For this reason,
BMW also initiated the organisation PartChain that uses blockchain technology
to increase transparency in worldwide supply chains for raw materials and
components. Other carmakers such as Volvo are also making the origin of cobalt
traceable using blockchain technology.
“By signing today’s supply contract with Managem, we are
further securing our raw material requirements for battery cells,” says Andreas
Wendt, BMW AG Board Member for Purchasing and Supplier Network. “By 2023, we
want to have 25 electrified models in our range, more than half of which will
be fully electric. The demand for raw materials is rising accordingly. For
cobalt alone, we expect our current demand to roughly triple by 2025”.
Much of the cobalt traded worldwide is mined in the Democratic
Republic of Congo. Cobalt from the Congo has come under increasing
international scrutiny since cobalt is mined there by hand (partly with child
labour and without adherence to safety standards) in addition to large
corporations (such as Glencore) with their correspondingly industrialised
mines.
BMW already announced in 2019 that it no longer wanted to obtain cobalt
from the Congo. Despite this, at the opening of the Battery Cell Competence
Centre in November 2019, BMW’s materials purchaser Peter Zisch announced this
option would not necessarily be excluded in the future. “We do not want to
exclude the Congo, it is our declared aim to source in the Congo again,” said
Zisch. “We believe that we can do this again from targeted mines from 2025
onwards.” In cooperation, BMW, BASF and Samsung SDI, are already supporting
corresponding projects in Congo to establish clean and transparent cobalt
extraction there.
In the current press release, Wendt also emphasises that
cobalt and other raw materials must be “extracted and processed under ethically
responsible conditions. The company has agreed with Managem on “the highest
standards of sustainability”. In a list published by BMW of the suppliers and
countries of origin of cobalt, Finland, Madagascar and Russia are mentioned in
addition to Australia and the Congo, although the list is dated June 2019.
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