SHANGHAI, Mar 1 (SMM) - On February 28, Ronbay Technology (688005) and GEM (002340) announced that the two parties signed a strategic cooperation agreement regarding power battery recycling, the nickel resources and smelting in Indonesia and the PCAM (precursor of cathode active materials) businesses, and will jointly build a closed production cycle of "nickel and cobalt resource mining - power battery recycling – ternary battery precursor manufacturing – ternary material manufacturing".
The cooperation is constituted of three parts:
1. Power battery recycling: Participation in Wuhan Power Battery Recycling Technology Co., Ltd (18% equity or shareholding), a subsidiary of GEM, and 26% of the products produced are offered to Ronbay at fair prices.
2. Nickel resources and smelting in Indonesia: Affiliated companies of GEM will offer 8% stake in PT.QMBNEWENERGYMATERIALS to Ronbay.
3. PCAM businesses: From 2022 to 2026, Ronbay expects to purchase no less than 300,000 mt of PCAM from GEM, while GEM will open up its OEM business to Ronbay, allowing party A to provide raw materials such as MHP, nickel matte, ternary products scrap, nickel metal and cobalt hydroxide for the production of nickel and cobalt salts or PCAM.
At the current stage, based on the pursuit of energy density, coupled with the impacts of steeply rising raw materials prices and quickly developing LFP market, the transition to high nickel ternary products is accelerating, and the proportion is increasing as well. By the end of 2021, among China's annual output of ternary materials, high nickel products accounted for 37% of the total, compared with 9% in 2018. This is accompanied by a rapid increase in demand for nickel resources. PCAM and material companies in the downstream shall not only expand their own production capacity, but also gradually deepen cooperation with upstream nickel resource companies to get well prepared for the transition to high nickel products.
Based on Ronbay's business layout, it has the largest ternary cathode material capacity in China, and the overall product structure is dominated by 8 series. Meanwhile, in terms of upstream business synergy, 38,000 mt and 6,000 mt of ternary precursor capacity have been formed in Yuyao, Zhejiang Province and Zhongzhou, South Korea respectively by the end of 2021. And the engaging in upstream smelting and mineral resources will become one of the core concerns for the future development of Ronbay's high nickel business.
The cooperation with GEM will, on the one hand, obtain addition nickel resources; and on the other hand, the cooperation in lithium recycling will further address the shortcomings of Ronbay in upstream resources and provide stronger resource support for the subsequent expansion of its own precursor and cathode material capacity.
