On July 31, Cmoc Group Limited announced a proposed revision and renewal of its ongoing related-party transaction agreement with Contemporary Amperex Technology Co., Limited, expanding sales of copper, cobalt, nickel, and other products. The new Commodity Sales Framework Agreement sets annual sales caps for 2026 to 2028 at 38.5 billion, 43 billion, and 50 billion US dollars respectively, a significant increase from the original caps of 22 billion US dollars for 2026 and 29 billion US dollars for 2027. The expansion in scale and duration stems from CMOC’s forecast of major volatility in copper and cobalt prices. The company noted that production from the KFM copper-cobalt mine is expected to rise sharply due to technological upgrades and capacity expansion, coupled with an upward trend in international copper prices, leading to anticipated substantial growth in transaction volumes. Additionally, the Democratic Republic of Congo’s export quota policy for cobalt is expected to cause significant fluctuations in export volumes and market prices from 2026 to 2028. The current agreement expires on December 31, 2027, and these transactions are expected to continue beyond that date. On August 6, reports indicated that the DRC banned exports of copper and cobalt concentrates, pushing London Metal Exchange copper futures up by 1.5% to $14,316 per ton. However, the new agreement is not one-sided; CMOC will also purchase copper and nickel products, as well as power battery systems and energy storage battery systems, from CATL, with procurement caps of 135 million, 185 million, and 190 million US dollars for 2026 through 2028 respectively.
Supply Chain Directly Connected to Mines
In the first half of this year, CATL’s battery system capacity reached 525 GWh, with production of 498 GWh and a capacity utilization rate of 94.86%, leaving its production lines nearly fully operational. Additionally, 764 GWh of capacity is under construction. If fully completed, CATL will achieve a TWh-level capacity, becoming the first company in the industry to reach this scale. As battery capacity approaches the TWh level, CATL’s supply chain management is bypassing intermediate traders and material suppliers, directly connecting to large mines and commodity markets. This new agreement with CMOC provides CATL with a direct procurement channel for copper, cobalt, and nickel valued at up to 131.5 billion US dollars (approximately 887.73 billion RMB) over three years, covering core raw materials for ternary battery cathodes (cobalt, nickel) and lithium battery copper foil (copper). However, the annual cap does not equate to actual sales. In 2024, 2025, and the first five months of 2026, actual sales amounts from CMOC to CATL were 800 million, 359 million, and 490 million US dollars respectively, all far below the current caps. Moreover, this is a framework agreement requiring specific contracts, with prices for each batch negotiated on a market-oriented basis, primarily referencing factors such as capital costs, base price coefficients, moisture content, and metal content. Thus, this framework represents CATL’s strategic move to secure long-term access to core resources, bypassing intermediate links to directly connect with upstream mining giants. This allows the company to directly deploy resources during price or supply fluctuations in copper, cobalt, or nickel, hedging risks and further solidifying its scale and cost advantages in the global power battery market.
Continuous Deepening of Strategic Partnership
CMOC is a globally leading mining and trading giant, listing on the Hong Kong Stock Exchange in 2007 and on the Shanghai Stock Exchange in 2012, achieving an "A+H" listing. The company controls key high-quality metal resources such as copper, cobalt, molybdenum, and tungsten globally, with operations spanning over 80 countries and regions across Asia, Africa, South America, and Europe. It currently ranks first in global cobalt production, holds leading positions in molybdenum, tungsten, and niobium output, and ranks among the top three globally in metal trading volume. The partnership between CATL and CMOC began in 2021. On April 10, 2021, the two companies reached a comprehensive strategic cooperation in the new energy metal resources sector, with CATL’s subsidiary, Brunp Times, acquiring a 25% stake in CMOC’s subsidiary, KFM Holdings, for a total consideration of 137.5 million US dollars, thereby securing a deep equity interest in the world-class, high-grade KFM copper-cobalt mine. In 2022, the cooperation deepened into equity binding. Through an "equity swap" between CATL’s wholly-owned subsidiary, Sichuan Times, and Luoyang Guohong, CATL indirectly held 24.68% of CMOC’s equity via a 100% equity injection in Luoyang Mining Group, becoming the second-largest shareholder of CMOC. In 2023, the partnership expanded into lithium resources. On January 20, 2023, Bolivia’s state-owned lithium company, YLB, signed an agreement with the CATL-Brunp-CMOC consortium (CBC), followed by a pilot plant agreement in January 2024. CBC plans to invest in two lithium salt processing plants in Bolivia to extract lithium from the Uyuni and Oruro salt flats. In November 2024, the Uyuni Salt Flat Lithium Carbonate Production Service Contract was finalized, with an investment of 1 billion US dollars, to build two plants with annual capacities of 10,000 tons and 25,000 tons of battery-grade lithium carbonate. Subsequently, CATL gradually strengthened its influence over CMOC. In June 2024, CMOC completed its board reshuffle, electing Lin Jiuxin as Vice Chairman (with a term ending at the 2026 annual general meeting) and Jiang Li as a member of various board committees. Qichacha data shows that both Lin Jiuxin and Jiang Li are executives of CATL. Lin Jiuxin serves as Deputy General Manager of CATL and Chairman of Snowy Mining, while Jiang Li is Deputy General Manager, Board Secretary of CATL, and Executive Director and General Manager of Luoyang Times Resource Holdings Co., Ltd. This new, large-scale long-term direct supply framework represents another deep binding upgrade after years of collaboration, extending and significantly raising the annual procurement caps. It reflects a shared judgment between the power battery leader and a key upstream mining company on supply-demand trends in the rapidly expanding global new energy industry, achieving mutual benefits across the industrial chain.
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