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Sumitomo Metal to hike output of key battery material

Sumitomo Metal Mining aims to grow its electric-vehicle battery material business.

TOKYO -- Sumitomo Metal Mining is looking to boost production of a key material for electric-vehicle batteries, with an eye toward securing orders for a new Tesla Motors model being released next year.

     Through Panasonic, Sumitomo Metal has been supplying effectively all the nickel-based material used in the positive electrodes of the U.S. carmaker's lithium-ion batteries. The Japanese metal company, which handles everything from mining, smelting and refining of nonferrous metals to production of various electronic materials, is about to launch a new plant in the town of Naraha in Fukushima Prefecture next month to boost output of the positive-electrode material. The company has been making the material at its domestic plants in Harima, Hyogo Prefecture, and Niihama, Ehime Prefecture.

     But it is already considering lifting production of the material further, centering on the Harima plant, to hike total monthly output capacity 40% to 2,550 tons by the year through March 2018. This ambitious move derives in part from Sumitomo Metal's desire to supply the material for the Model 3 mass-market electric vehicle that Tesla is planning to launch in 2017.

     Sumitomo Metal is also considering ramping up output of the type of positive electrode material used in Toyota Motor's new Prius hybrid vehicle. For those capacity increases, Sumitomo Metal will likely invest about 20 billion yen ($180 million) in the next three years.

     The company also aims to bolster its production of nickel, a key metal in making positive-electrode materials. Spending 300 million yen in 2018, Sumitomo Metal plans to raise annual capacity at its Taganito nickel refinery on the Philippines' Mindanao Island by 20% to 36,000 tons, further strengthening its ability to handle everything from raw material procurement and refining to production of positive-electrode materials.

     The company's materials business is projected to generate 172 billion yen in sales, or 20% of overall group sales, in the current year through March 31, with the segment's pretax profit forecast at 5 billion yen. In three years, Sumitomo Metal aims to raise the profit figure to 20 billion yen.

     By beefing up its battery and materials business, the company hopes to make its earnings more stable, since its mining and refining operations are highly prone to the ups and downs of commodity prices.

(Nikkei)

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