Sumitomo expands battery plant capacity with plans to explore USA’s Electric Vehicle market

Sumitomo Metal, a key supplier of nickel-cobalt-aluminium (NCA) cathode materials to Panasonic lithium-ion batteries used in Tesla electric vehicles, is expanding its annual cathode production capacity by 24,000 metric tonnes in Niihama, western Japan, by 2025 from the current capacity of 60,000 tonnes.

To meet the surging demand for electric vehicles, the company is also exploring options to produce cathode battery materials in the United States and other regions. This move is expected to help Sumitomo Metal reinforce its position as a leading supplier of cathode battery materials and contribute to the development of the electric vehicle industry.

The managing executive officer of Sumitomo Metal, Katsuya Tanaka, asserted: "Where and when to increase our production capacity next time depends on each country's regulations and laws."

"We are examining the impact from any changes to laws and regulations, including the U.S. Inflation Reduction Act (IRA), will have on business if we were to invest in the United States, especially with the presidential election coming up next year," he added.

The Inflation Reduction Act (IRA) is an essential step towards cutting carbon emissions and boosting domestic production and manufacturing capabilities. Sumitomo Metal has set ambitious goals to increase its annual output capacity, aiming for 120,000 tonnes by March 2028 and 180,000 tonnes by March 2031.

Additionally, the company, which operates as a miner and smelter, is actively exploring new opportunities, including a new nickel mine. It has decided to abandon a long-running feasibility study on an Indonesian nickel project in Pomalaa and instead is focusing on its new ventures.

Australia's nickel sulphide explorer Ardea Resources has announced an exciting development, revealing in July that it has entered into a non-binding agreement with a Japanese consortium consisting of Sumitomo Metal, Mitsubishi and Mitsui.

The General Manager of the Battery Materials Division, Sumitomo Metal, Masaru Takebayashi, specified: "Currently, we are evaluating Ardea's report on the preliminary study while discussing a more detailed study."

"We are still in the preliminary study stage, and whether we will join the project depends on the outcome of the studies," he said, implicating that the company is also checking out some other relevant projects.

The consortium is planning to conduct a feasibility assessment at Ardea Resources' Kalgoorlie Nickel Project Goongarrie Hub in Western Australia, with the aim of boosting annual nickel output capacity to 150,000 tonnes in the long term from its current capacity of 82,000 tonnes. This partnership between Ardea Resources and the Japanese consortium is expected to pave the way for promising developments in the future of nickel production in Australia.

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