Tsingshan, the world’s largest producer of stainless steel, has invested in producing batteries for electric vehicles from cast nickel, which is less expensive than refined nickel. But their environmental impact could curb its ambitions.

What if Tsingshan Holding Group succeeded in its bet? The Chinese steelmaker has decided to tackle one of the major future bottlenecks in battery production: nickel supply. As demand for nickel sulphate explodes, high-grade deposits are becoming scarce.In 2021, this conglomerate with around 45 billion euros in turnover, the world’s largest producer of stainless steel and nickel, started production of battery-grade nickel from a new route using ore at low content, much more abundant. A technology, not revolutionary in itself, but which would flood the market, provided that Tsingshan succeeds in overcoming environmental obstacles. Outside of China , the high carbon footprint of its products puts off automakers. In response, Tsingshan promises investments in solar and hydroelectricity.

At the London Metal Exchange (LME), the slightest announcement from the private group, discreet about its figures, is enough to panic nickel prices. “He has already demonstrated his ability to carry out his projects,” admits Yves Jégourel, economist at the University of Bordeaux. Its founder Xiang Guangda, originally from Wenzhou, began in 1988 by producing car doors, before embarking on the manufacture of stainless steel. It gradually integrated the entire chain, up to the transformation of nickel upstream, of which stainless steel is the main outlet. Tsingshan has earned a solid reputation for competitiveness. “Like all Chinese groups, it has lower investment costs,” notes Nikhil Shah, analyst at CRU Group.Vertical integration of batteriesThe steelmaker, which now supplies a fifth of the world’s stainless steel and which produced 500,000 tonnes of nickel in 2020, has also shown itself to be a visionary. When nickel prices were at their peak, he pioneered the use of NPI, a semi-finished product less expensive than refined nickel, to manufacture stainless steel.He was also the first, in 2009, to invest in Indonesia, on the island of Sulawesi, before the country became the world’s largest nickel producer. The industrialist has secured access to the mine, by taking over 53% of the huge Indonesian deposit of Weda Bay, alongside Eramet . His arrival was seen as a boon by the French mining company, dropped by its Japanese partner. In the midst of the depression in nickel prices, the candidates were not jostling to co-invest. The Chinese group, which multiplies partnerships, jumped at the chance. It is again with Eramet that Tsingshan diversified into lithium in 2021, contributing 375 million euros to a project in Argentina, mothballed for a year, in exchange for 49.9% of the shares.By capitalizing on its access to metals, Tsingshan now intends to vertically integrate the entire electric battery production chain. Until the final product. While it invests in stainless steel factories in India , the United States and Zimbabwe, it already has a production site for lithium ion batteries in Wenzhou for energy storage and vehicles.

In rare earths, the essential China rare earth group

Anxious to strengthen its control over the exploitation of rare earths, Beijing is pushing the consolidation of the sector around two new behemoths. In the south of the country, China Rare Earth Group merges three public groups specializing in heavy rare earths. In the north, the two specialists in so-called light rare earths, China Northern Rare Earth and China Rare Earth Holding have initiated a merger. China already controls 60% of the world’s extraction of these metals, which are essential for permanent magnets and the defense industry. Its dominance is even stronger in refining, where its market share borders on 85%. What makes the Chinese groups impossible to circumvent. In the United States, one of the shareholders of MP Materials, which is operating the restart of the Mountain Pass mine, is Shenghe Resources, listed in Shanghai.

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