Glencore will supply cobalt to Chinese battery manufacturer Green Eco-manufacture Hi-tech (GEM) for an additional five years after expanding their partnership.
The new agreement will see Glencore supply GEM with approximately 150,000 tonnes of cobalt contained in hydroxide between 2020 and 2029.
Glencore and GEM have agreed to include responsible sourcing and sustainable practices into their partnership.
This includes a commitment to the Cobalt Refiner Supply Chain Due Diligence Standard developed by the Responsible Minerals Initiative, Responsible Cobalt Initiative and Chinese Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters.
Glencore has cobalt assets across Australia, Africa, Europe and North America, including the Murrin Murrin nickel-cobalt operation in Western Australia.
Glencore head of marketing, copper and cobalt Nico Paraskevas said the commodity was a major part of battery manufacturing, which were vital to a low carbon economy.
“Long term security of cobalt supply and cobalt demand visibility are critical to prevent supply shortages that could impede the energy transition and, ultimately, the world’s ability to meet climate change targets,” he said.
“As the cobalt supply chain matures with greater emphasis on long term partnerships, this contract is just one example of Glencore and its customers working together towards the adoption of industry leading standards on responsible sourcing and environmental and social corporate governance.”
Glencore is also part of the Cobalt Institute that has created the Cobalt Industry Responsible Assessment Framework (CIRAF).
The CIRAF assists members of the cobalt supply chain to find production and sourcing related risks.
GEM chairman Xu Kai Hua welcomed the agreement with Glencore and said it would address cobalt demand in China’s new energy market.
“Glencore, the world’s largest producer of responsible cobalt, has maintained strong cooperation with GEM for many years,” he said.
“This 10-year cobalt supply agreement reflects a deepening of the strategic cooperation between cobalt resources and the market in the face of the changing competitive landscape and the booming trend of new energy in the world and will fundamentally stabilise the development of GEM cobalt products.
“There is a huge demand for cobalt resources in the global market.”