Xiamen Tungsten Co.,Ltd. (600549.SH), or XTC New Energy announced on August 3rd, confirming to establish a joint venture with the French company Orano and initiate the construction project of an annual production of 40,000 tons of cathode precursors.
Both parties' respective holding subsidiaries, XTC New Energy Materials Europe GmbH and Orano PCAM, have established a joint venture in France called "Orano/XTC New Energy-PCAM, Société par actions simplifiée," with a total investment of 210 million euros, of which Orano PCAM contributes 107.1 million euros in cash, holding a 51% stake; XTC New Energy Materials Europe GmbH contributes 102.9 million euros in cash, holding a 49% stake. The board of directors of the joint venture consists of 5 members, with Orano PCAM nominating 3 and XTC New Energy Materials Europe GmbH nominating 2.
The joint venture "Orano/XTC New Energy-PCAM, Société par actions simplifiée," will serve as the implementing entity for the annual production of 40,000 tons of cathode material precursors project. The project will be located in Dunkirk, Hauts-de-France, France, with a planned investment of about 3.16 billion yuan (including tax), and the main construction content includes 2 main buildings for cathode material precursors, product warehouses, raw material storage, water treatment security center, R&D center, and related auxiliary facilities.
Planning of XTC New Energy Materials Europe GmbH
XTC New Energy had already announced its project investment plan in France as early as 2023. On May 17, 2023, XTC New Energy signed a joint venture agreement with Orano Group's subsidiary Orano PCAM, to establish a precursor joint venture in France, with XTC New Energy Materials Europe GmbH contributing 49% and Orano PCAM contributing 51%.
In September 2023, XTC New Energy announced that it would also cooperate with Orano CAM in France to establish a joint venture for cathode materials, planning to build an annual production line of 40,000 tons of nickel-manganese-cobalt cathode materials, to support the downstream capacity of the planned precursor project; with XTC New Energy Materials Europe GmbH holding 51%.
On May 7th of this year, XTC New Energy announced the signing of an agreement with French ORANO SA to establish a comprehensive strategic partnership in the battery industry. Both parties will establish a cathode (CAM) factory controlled by XTC New Energy and a cathode precursor (PCAM) factory controlled by ORANO, and will carry out technical cooperation and development innovation in establishing R&D centers, technology exchange, and talent training in France to enhance product competitiveness. At the same time, both parties will also explore business models and market opportunities in the field of battery recycling and raw material security, to create a closed-loop business for the lithium-ion battery industry chain.
According to the announcement of XTC New Energy in September last year, the construction period of the cathode material project in France is about 44 months, to be completed in two phases, with the final completion of an annual production workshop of 40,000 tons of nickel-manganese-cobalt cathode materials; the first phase of 20,000 tons of cathode material capacity is expected to be completed and trial production in the fourth quarter of 2025, and the second phase is expected to be completed in the third quarter of 2027. Currently, the cathode material factory is in the preparatory stage of construction. The current cathode material precursor project matches the demand of its cathode material production line in France.
XTC New Energy is mainly engaged in the research and development, production, and sales of new energy battery materials, with main products including LCO (lithium cobalt oxide), NCM (nickel-manganese-cobalt) materials, hydrogen energy materials, etc., holding an important position in the supply of new energy battery cathode materials.
Orano PCAM is a subsidiary of the French multinational energy company Orano Group, using its expertise in nuclear material processing and recycling, material chemistry, hydrometallurgy, and industrialization, it is developing industrial processes in the field of batteries, aiming to recycle materials from batteries for the production of precursors and cathode materials.
According to XTC New Energy's announcement, Orano PCAM can provide local resources for the joint venture to ensure the smooth production of the French project, and with the experience of local production management of local enterprises, it can provide experience and help for the site selection, legal services, construction, and local operation of the joint venture factory; at the same time, it can leverage the industrial chain advantages of the partner to gain the trust of customers and recycle resources.
On the same day, XTC New Energy also released its semi-annual report for 2024. In terms of sales volume, in the first half of this year, the company's lithium-ion battery cathode material product sales volume was 44,800 tons. Among them, LCO achieved sales of 18,400 tons, a year-on-year increase of 29.98%; NMC materials achieved sales of 26,300 tons, a year-on-year increase of 108.59%. XTC New Energy has a clear competitive advantage in the customer electronics market for lithium cobalt oxide and high-voltage nickel-manganese-cobalt materials for electric vehicles. However, due to the overall pressure of nickel-manganese-cobalt materials facing the squeeze of lithium iron phosphate (LFP), in the first half of 2024, the revenue and net profit of XTC New Energy continued to decline, achieving operating income of 6.3 billion yuan, a year-on-year decrease of 22.43%; net profit attributable to the parent company was 239 million yuan, a year-on-year decrease of 6.12%. Despite the pressure on performance, the company has not given up on overseas expansion.
The investment in the French project by XTC New Energy is mainly to meet the local demand for cathode materials in France. According to incomplete statistics, at present, battery companies including CATL and EVE Energy have planned more than 500GWh of overseas battery capacity, and the demand for localized supply of battery materials such as cathode materials is becoming more and more vigorous, and France is gradually becoming one of the key destinations for domestic expansion overseas. In addition to supporting China's overseas battery capacity, the completion of XTC's battery material capacity can also radiate to the whole European market, meeting the local demand for battery materials in Europe, and enhance Europe's competitiveness in the global battery industry chain.
