By Samuel Indyk
Investing.com – Johnson Matthey today announced new raw material supply agreements and a new strategic partnership for sustainable battery materials production.
Strategic partnership for sustainable battery material production
The company has agreed a strategic partnership with Finnish Minerals Group to locate a second commercial plant for eLNO cathode materials with nameplate capacity of 30kT, in Finland.
The company chose Finland due to its favourable battery materials ecosystem, offering reliable access to renewable energy, sustainable raw materials and proximity to major European automotive OEM and cell manufacturers.
As part of the agreement, Finnish Minerals Group will invest in two areas. Firstly to co-develop an integrated solution to treat sodium sulphate. Secondly in pre-treatment technology of nickel and cobalt sulphates to tailor the materials to the requirements of high nickel cathode materials.
Raw materials supply
Alongside the announcement, Johnson Matthey (LON:JMAT) also said it had signed supply agreement for critical raw materials.
The company signed a term sheet with Nornickel for the supply of nickel and cobalt from Nornickel’s refineries in Harjavalta, Finland and the Kola region in Russia.
Johnson Matthey also signed a lithium supply agreement with SQM (NYSE:SQM). The two Global Battery Alliance members have agreed for SQM to supply Johnson Matthey with lithium hydroxide from its Salar del Carmen plant in Antofagasta (LON:ANTO), Chile.
“The partnership with Finnish Minerals Group, and the long term supply of critical raw materials with Nornickel and SQM, are important milestones on our journey towards developing a sustainable battery materials ecosystem and further demonstrate the progress we are making on the commercialisation of our business,” said Johnson Matthey CEO Robert MacLeod.
The news comes as Johnson Matthey tries to diversify away from catalytic converters and other products for internal combustion engines and focuses on more sustainable technologies.
“Johnson Matthey is making moves to turn itself into an electric vehicle supplier as it makes progress on expanding eLNO production," said Hargreaves Lansdown (LON:HRGV) equity analyst Laura Hoy. "Right now, eLNO makes up just a fraction of overall revenue, so the sooner the group can scale up commercial production, the better."
"It will be some time before eLNO will move the needle for Johnson Matthey, but as long as construction remains on-track this year we expect to see evidence that eLNO can be a player in the battery space over the next few years.“
At 10:18BST, Johnson Matthey shares were trading higher by 0.75% at £32.10.