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Glencore’s ceo warns carmakers against Chinese supply reliance
Glencore’s ceo Ivan Glasenberg warned western carmakers that they have to act quickly to ensure access to battery raw materials and not be “naïve” to rely on Chinese supply.
Speaking at the Financial Times’ FT Car conference, monitored by Kallanish, the ceo outlined three “clear options” to carmakers to ensure they have supply and try to hedge themselves against the price volatility in the commodities arena.
He said the companies should sign long-term supply contracts; invest directly in the mines; and acquire equity stakes in pure battery material producers. Glasenberg notes Glencore produces important battery materials such as vanadium, copper, nickel and cobalt.
Without securing supplies of cobalt, US and European carmakers may struggle to catch up with the Chinese, he suggests. Chinese firms realised the vulnerability of their supply chain and now control 40% of the cobalt production in the Democratic Republic of the Congo, the ceo adds, noting Glencore is the only major western cobalt miner in the country.
Asked on whether carmakers risk facing a chip-like supply shortage if new supply doesn’t come online soon, Glasenberg responded: “western car companies could face chip shortage, battery shortage, but they will all drive Chinese electric vehicles so there won’t be a shortage of the vehicles, they will just be produced in China.”
According to the outgoing ceo, Glencore would consider selling a stake in one of its mines in the DRC, but to date it has not been approached by any carmakers.
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Anonymous
Very good overview of the weekly steel market.
Anonymous