MOSCOW (Reuters) - Russia's mining giant Norilsk Nickel (Nornickel) (GMKN.MM) is in talks with German chemicals firm BASF (BASFn.DE) to supply raw materials needed in the process for making lithium-ion batteries in Europe in the future, they said on Tuesday.
The talks between BASF and Nornickel, the world's second largest nickel producer and a major cobalt producer, highlight the burgeoning market for metals needed for lithium-ion batteries production as the car industry's push towards electric vehicles gathers pace.
Nornickel and BASF said in a joint statement the talks covered "cooperation to set the foundation to supply battery cell producers for electric vehicles in Europe with regionally produced cathode materials."
BASF intended to invest up to 400 million euro ($452 million) as a first step to build production plants for cathode materials in Europe, the statement said.
Through the prospective agreement, BASF would receive the raw materials from the Nornickel's metal refinery in Harjavalta, Finland. Nornickel would also provide a supply of nickel and cobalt feedstock from its Russian mines at market prices.
"The envisioned cooperation with Nornickel and the construction of new BASF battery materials production plants in Europe, will result in a robust supply chain and enable BASF to expand its production of battery materials on a global scale," Kenneth Lane, the head of BASF's catalysts division, said in the statement.
BASF supplies cathode materials to the Asian and the U.S. markets, while the cooperation with Nornickel will help it to expand access to the European market.
"For Nornickel this project is an opportunity to increase our exposure to the high-potential and fast-growing rechargeable battery materials market," Sergey Batekhin, Nornickel's head of sales, said.
"We are interested in supporting this target market with our nickel and cobalt products. The electric vehicle industry is set to contribute to a sustainable development."
Reporting by Polina Devitt; Editing by Edmund Balir and David Evans