LG Chem to raise low cobalt battery sales to 40% next year

LG Chem, a leading battery maker in South Korea, said Monday the company will increase the sales portion of low cobalt batteries for laptops and other digital devices to 40 percent next year, in light of the industry’s efforts to reduce cobalt use.

The company has been trying to reduce cobalt use for various IT applications. Cobalt is a raw material that is difficult to secure due to its tight supply stemming from political risks in the primary cobalt producer, the Democratic Republic of Congo.

Due to explosive growth in the number of information technology devices, the amount of cobalt used for laptop and other IT device batteries stood at 30,000 tons last year, exceeding that used for electric vehicles, according to the industry.

To reduce its reliance on the cobalt mineral, LG Chem said it decided pre-emptively to expand the sales portion of the low cobalt battery products from the current 10 percent to 40 percent next year and 60 percent by 2020.

Volatility in cobalt prices is high that global battery manufacturers have been signing long-term cobalt supply contracts with developers in order to secure the resource in a stable manner.

The average cobalt price peaked at $95,500 per ton in March, soaring from $20,000 to $30,000 in 2016.

Compared to the current lithium-cobalt-oxide batteries that contain 100 percent cobalt, newly produced nickel-cobalt-manganese batteries use 20 to 30 percent cobalt.

The Korean firm’s newest technology enables reducing the proportion of cobalt use in the NCM cathode of a lithium-ion battery by more than 70 percent, while keeping the energy density at a similar level as the LCO cathode, according to the company.

The company also aims to start mass production of high-nickel batteries that keep the cobalt use below 5 percent in the cathode and raise the nickel use up to 90 percent by 2020.

“LG Chem will continue reducing the cobalt use for various IT applications down the road,” said Kim Jong-hyun, president of the battery division at LG Chem.

By Song Su-hyun (song@heraldcorp.com)