SK Innovation signed a contract on Dec. 4 to purchase cobalt, a key material for batteries for electric vehicles, for a long period of time.
SK Innovation said that it has signed a contract with Glencore of Switzerland, the world's No. 1 cobalt producer, to purchase about 30,000 tons of cobalt for six years from 2020 to 2025. This amount can produce batteries that can be used for about 3 million electric vehicles.
SK Innovation is able to respond to growing demands for batteries as it has secured key raw materials in a stable manner.
Related industries expect the global electric vehicle battery market to grow at an annual average rate of 25 percent and rapidly grow to about 182 trillion won in 2025. As a result, demand for cobalt, a key mineral, is also expected to increase. Global demand for cobalt for electric vehicles is expected to reach 32,000 tons next year and 92,000 tons in 2025.
SK Innovation stressed that it carries out its ethical responsibility in the process of purchasing cobalt.
The two companies agreed to receive an external audit of the cobalt production process from a third-party agency each year. It follows the cobalt refinery supply chain due diligence standard of Responsible Minerals Initiative (RMI), a global consultative body on minerals procurement and supply chain management.
Human rights issues continue to arise in the process of mining and producing minerals. In particular, cobalt is fast growing in demand in line with the growth of the battery market, and has become a global issue over labor exploitation of children in Africa, a major producer.
