Renault Group and mining and hydrometallurgy giant Managem Group have signed an agreement to guarantee a sustainable supply of low-carbon cobalt sulphate produced in Morocco.
FOCUSM PROD
Renault Group and Managem Group sign an agreement for a sustainable supply of Moroccan Cobalt. Image credit: Renault Maroc.
As part of the agreement, the Managem Group will supply 5,000 tonnes of cobalt sulphate per year to Renault over a seven-year period, with the first delivery set to be in 2025. This is equivalent to an annual battery production capacity of 15 GWh.
Managem will also invest in a factory within the Guemassa industrial complex in Morocco, in order to make cobalt into cobalt sulphate.
Renault and Managem said that the agreement was part of their “strategy to build a more sustainable and transparent battery value chain.”
The deal can also be seen as a move by Renault and Managem to try and forge a new more sustainable and ethical path away from the world’s current dependence on the cobalt produced in the Democratic Republic of the Congo.
The DRC currently produces as much as 70% of the world’s supply of cobalt, but the mines have been linked to human rights abuses and child labour.
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In a shared statement, Renault and Managem suggested that the latest partnership was only the beginning of their collaboration, saying: “This agreement notably includes the possibility for Managem Group, Renault Group and its Alliance partners to advance further cooperation in the supply of manganese sulphate and copper, as well as on the recycling of battery materials in short loops.”
The Memorandum of Understanding also follows the commitments made by Renault Group to Morocco in July 2021, when the company said it would develop the Renault ecosystem in the country and increase local sourcing to €3 billion by 2025.
Mr. Ryad Mezzour, Morocco’s Minister of Industry and Trade, said: “A new stage in the strategic partnership between Morocco and Renault Group begins with the signing of this agreement today, which will utilise Moroccan natural resources and industry to support the development of electric mobility worldwide.”
The current price of cobalt is also likely to have sealed the deal between Renault and Managem. In 2021 the total demand for cobalt was 175,000 tonnes against a mined supply of 160,000 tonnes, causing the prices to skyrocket: it is currently trading at a four-year high on the London Stock Exchange – for as much as $71,000 (€66,586) a tonne.
Cobalt is becoming ever more important as the demand for electric vehicles continues to grow: it is one of the primary metals used in the lithium-ion batteries used to power EVs.
The batteries are charged when lithium ions run between the anode and cathode, and the cobalt prevents the cathodes from catching fire. This way the metal works as an important protective measure and helps to elongate the life of batteries.
Lithium batteries are also used to store energy from renewable sources such as solar power – making cobalt currently a major player in the green transition. The metal is additionally used in sterilising medical equipment, in imaging for medicine and in the batteries of smartphones and laptops.
Nevertheless, automation has become the sector now using the largest amount of cobalt. A Cobalt Institute report showed that the automotive industry made up 34% of total cobalt demand in 2021 – the same year that EV sales doubled.
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Batteries are one the most expensive element of EVs, making up 30% of the total price of the vehicle, and this is after an 89% drop in costs over the last decade. Because of this, automakers like Renault are looking to both shift away from cobalt usage in EVs, and find more sustainable, and with that, ethical, ways of sourcing cobalt.
The car giant announced it would be setting up 'Renault ElectriCity' in March. This will consist of three massive EV manufacturing plants in northern France which aim to produce 400,000 electric vehicles a year by 2025. The Group also aims to reduce the carbon footprint of its batteries by 20% by 2025 and by 35% by 2030, working off its 2020 figures.
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