Roskill: Cathode and precursor materials, China XTC signs deals with GEM to secure precursor materials supply.
Chinese cathode producer XTC New Energy Materials, a unit of Xiamen Tungsten, signed a supply agreement with Jingmen GEM, a subsidiary of GEM. Under this agreement, Jingmen GEM will supply 5-15ktpy of cobalt tetroxide and 15-35ktpy of lithium nickel cobalt manganese oxide (NCM) precursor materials to XTC New Energy Materials until the end of 2023.
The two companies also confirmed to build long-term strategic partnerships covering mineral resources development, procurement and sales, product processing, and information sharing.
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This is the second long-term precursor supply XTC New Energy Materials has secured this year. On September 14, XTC signed a similar “Strategic Cooperation Framework Agreement” with China’s leading precursor supplier CNGR. CNGR will supply 20-25ktpy of cobalt tetroxide and 15-35ktpy of lithium nickel cobalt manganese oxide (NCM) precursor materials to XTC New Energy Materials until the end of 2023.
XTC New Energy Materials now has an existing cathode capacity of around 60ktpy and plans to increase capacity to 260ktpy in the long-term. This will come from the addition of a new 40ktpy NCM project under construction and 160ktpy NCM+LFP project newly invested in Yaan, Sichuan.
As a subsidiary of Xiamen Tungsten, XTC New Energy Materials focuses on new energy materials and was successfully listed in August 2021. The precursor supply agreements signed successively with China’s leading precursor manufacturers CNGR and GEM will secure its precursor supply as it looks to expand its cathode capacity at a rapid pace.
Roskill believes the supply agreement with GEM on cobalt tetroxide and NCM precursors materials would allow XTC to strengthen its supply chain and create greater resilience for cathode materials production.
Importantly, the collaboration with GEM, the world’s leading ternary precursor materials provider, on product processing as well as procurement and sales would put XTC in a good position to develop new cathode products and optimize cost structure.
It is also noted that mineral resources development is a key component of the long-term strategic partnerships between XTC and GEM. Roskill believes this is expected to create synergiesfor both companies in terms of securing key raw materials supply.
Driven by the strong downstream demand, key players throughout the lithium-ion battery supply chain have been striving to gain control over the supply of battery raw materials, which is particularly important for precursor and cathode manufacturers.
XTC New Energy went public on 5 August. Roskill’s research shows that, including XTC New Energy, four Chinese cathode companies have gone public on the Science and Technology Innovation Board of the Shanghai Stock Exchange since August 2021.
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Cathode and precursor materials: China’s XTC signs deals with GEM to secure precursor materials supply, October 21, 2021
