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Share on Facebook (opens new window) Share on LinkedIn (opens new window) Save Save to myFT Henry Sanderson 6 HOURS AGO BMW is on the verge of signing a landmark deal for the long-term supply of battery metals lithium and cobalt, as it moves to secure raw materials for its push into electric vehicles over the next decade. The German carmaker, which has been an early mover among established manufacturers in embracing electrification, said the contracts will guarantee supply for the next five to 10 years, according to spokesman Michael Rebstock. “Our target is to make sure we have supply for at least five and better 10 years,” Mr Rebstock told the Financial Times. “For us it’s very important to make sure that our plans won’t suffer from a lack of supply.” The deal comes as carmakers race to secure supplies of critical raw materials needed for electric car batteries, which have jumped in price over the past two years. Last year BMW’s competitor Volkswagen launched a tender for five years supply of cobalt and invited suppliers to its headquarters in Wolfsburg. Discussions are understood to be ongoing with suppliers of the metal. The price of cobalt and lithium have more than doubled over the past year due to rising sales of electric vehicles, which topped 1.2m in 2017. Mr Rebstock would not reveal the names of the suppliers or the total volumes involved. He said the total amount will be “far below” the 100,000 tonnes of cobalt suggested in German media — an amount that would be more than the entire output of the refined cobalt market last year, according BMO Capital Markets. Lithium and cobalt cannot be hedged as easily as other metals such as steel, copper and nickel, making it difficult for carmakers to limit their exposure to volatile prices. BMW’s contracts are linked to a pricing index but capped at a certain level to give the carmaker “some security when we are planning for the next couple of years,” Mr Rebstock said. Securing supply of metals such as cobalt also helps to ensure it is mined sustainably, according to Mr Rebstock. Over half of the world’s cobalt comes from the Democratic Republic of Congo, where an estimated 20 per cent of it is mined by hand, often by children.
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