From nickel to energy


While more than 70% of global nickel demand is consumed by the stainless steel industry, this metal is becoming increasingly sought after in the emerging markets for electric vehicles (EV) and energy storage systems (ESS). And the world’s largest stainless steel company, Tsingshan Group, is offering an entire supply chain – from upstream nickel mining to downstream applications. The company sees the expansion from steel to energy as an industry upgrade.

China-based private stainless steel giant Tsingshan Group is now exploring a new frontier with its entrance into the clean energy industry. Nickel is one of the most crucial raw materials being used for lithium NMC (nickel manganese cobalt oxide) batteries, which have become the leading lithium-ion battery technology behind the rise of electric vehicles (EV) and energy storage systems (ESS).

Jiang Sen, a Tsingshan Group veteran with decades of experience in the company, now serves as its executive vice president. Sen met with pv magazine to discuss the development and growth of the group. The company’s model has been evolving over time, which is priming it to move into a leadership position to support the clean energy transition, Sen explains. “A better future is ahead of us, and we are happy to be joining to contribute,” he adds.

Upstream expansion

As chemical elements such as nickel and chromium are crucial to Tsinghan’s core steel business, the company began to expand into the upstream market for stable supplements at an early stage.

“The most aggressive and successful expansion for us was the acquisition of a nickel ore mine in Indonesia, and the later establishment of a nickel production base there,” Sen says.

During the subprime crisis in 2007, Tsingshan Group exhausted all efforts to purchase a nickel ore mine on the island of Sulawesi in Indonesia, to serve as its fundamental nickel supply center. And later in 2013, when Indonesia modified its export policy and executed quota management to nickel mineral producers exporting worldwide, Tsingshan established a smelting factory in a local industrial park, to accompany its previously purchased mining assets.

After more than $4.4 billion worth of investment and six years of hard work, Tsingshan Group has obtained the world’s largest nickel syndicate – including nickel ore mining, nickel refining, purification, ferronickel production, crude steel production, logistics, port management, trading, and transportation. Its operations have become one of the largest foreign investment projects in Indonesia.

Taking control

In the stainless steel and nickel mining industry, Tsingshan Group became one of the top controllers of nickel resources in the world. “In 2019, we produced more than 330,000 tons of nickel and the global output was about 2,400,000 tons. And we expect to have another 110,000 tons of new capacity to be commissioned by the end of 2020,” says Sen, noting the importance of Tsingshan’s role in the global nickel supply chain.

The anode materials of NMC batteries consist of lithium, nickel, cobalt, and other metals, with the ratio of nickel to cobalt to lithium being 8 to 1 to 1, which is why these batteries are also called “811” batteries. The power density of 811 batteries stands at 304 Wh per kg, and the combination of increased power density and reduced production costs have made this battery technology the new frontrunner for EV and ESS applications.

With nickel proportion working in its favor for mainstream lithium-ion battery technology, Tsingshan Holdings saw the prospective opportunity for field expansion, and decided to join the game.

Nickel to batteries

“Based on Tsingshan’s nickel resources, the company has built up a production chain to take part in the renewable energy market, particularly in the field of lithium-ion battery technology,” Sen says of the company’s strategic decision.

In 2017, Tsingshan Group acquired Ruipu Energy to handle smart production of advanced lithium-ion battery technology. The company says that its state-of-the-art production facility for NMC and LFP battery cells, modules, and battery packs offers the most sophisticated automatic production lines and robotics used in China to date. Ruipu Energy’s manufacturing base in Wenzhou, China, required CNY 5 billion ($709.5 million) of investment, with a current stated annual battery production capacity of 6 GWh beginning in April 2020.

In October 2018, Tsingshan Group entered a joint venture with Guangzhou Automotive Corporation (GAC) Group and Guangxin Holding Group, to invest in a new vertically integrated company for battery production to include hydrometallurgical nickel-cobalt chemicals, precursors and cathode materials, lithium-ion batteries, and battery packs.

Adding another link to the battery chain, Tsingshan Group and GEM Company jointly invested in Qingmei Energy Materials to produce precursor and cathode materials for NMC batteries. Qingmei plans to reach 50,000 tons of NMC precursor capacity and 20,000 tons of cathode material output. As the core material for lithium-ion batteries, the joint venture has received support from the world’s top five battery giants: Samsung SDI, CATL, Panasonic, LG Chem, and BYD. The company says it began successfully delivering its products in late 2019.

To gain additional battery-grade nickel resources, which have higher qualifications than those of stainless steel, in September 2018 Tsingshan joined GEM, Brunp Recycling, and Hanwa in signing yet another joint venture agreement for the construction of a plant to produce nickel sulfate crystals from laterite nickels in Indonesia. The partnership has drawn more than $700 million of investment and is scheduled to deliver 50,000 tons of nickel capacity per year. “The laterite nickels of Indonesia are particularly suitable for battery-grade nickel smelting because of the associated ore of cobalt, a rare and expensive but indispensable element for lithium batteries,” says Jiang. “We have the best resources for batteries.”

Production to application

After obtaining the capabilities of nickel ore mining, NMC precursor and cathode material production, battery manufacturing, pack designing and testing, Tsingshan Group took the next step on its mission to claim a piece of the battery storage market. It has now invested in FoxESS as its application representative for the battery storage sector. Supporting the entire energy storage supply chain of Tsingshan Group, FoxESS provides its customers with competitive business solutions in PV inverters, AC storage inverters, hybrid inverters, and distributed PV-storage systems.

And with this support, FoxESS now aims to take a leading position in the inverter field, particularly for hybrid inverters in the distributed solar+storage market. Within only a few months of its establishment, FoxESS has built up its distribution network for marketing, sales, and support in Europe, Australia, and India, with plans for additional expansion.

Owning the supply chain

With the advantages of running an entire industrial supply chain from upstream nickel mining, NMC precursors and cathode material production to battery manufacturing and downstream applications, Tsingshan Group says it is utilizing the whole system to step up as a world-class battery leader.

“Just like our previous successful experience in stainless steel and nickel production, Tsingshan is looking forward to yet another success in the market of lithium NMC batteries,” says Sen. “We aren’t looking to be number two.”

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