Photo: Mike Birdy, Pexels

Finland aims to be the leading country in battery production

A new company called Finnish Minerals Group is speeding up the development of the battery business in Finland. The goal is to create a battery cluster that covers the entire value chain.

Text: Timo Hämäläinen

– Finland has excellent opportunities to build the leading ecosystem for battery production in Europe, CEO Matti Hietanen says.

Finnish Minerals Group was founded in May 2018, when the Finnish Government reorganised its holdings of mining operations and centralised its mining investments in a new holding and development company.

The company is the main shareholder of Terrafame Oy, which is continuing the mining operations of the bankrupted Talvivaara Sotkamo Oy. The company went bankrupt due to problems related to watercourses and the environment, among others.

– In only a couple of years, Terrafame has resolved the previous environmental problems and increased its production volumes as planned. Its profitability has improved, and its last year’s operating margin showed a profit, Hietanen says.

Terrafame has obtained EUR 350 million of funding for mining operations and investments from private investors. Currently, the company is making preparations for building a battery chemical plant, an investment of some EUR 200 million.

– The design process for the chemical plant has proceeded on schedule, and the EIA procedure is underway. Project preparations have taken roughly 18 months, and production is expected to start in two years, Hietanen says.

The battery chemical plant will process the currently produced nickel and cobalt minerals into battery chemicals.  The planned production capacity is high, even on an international scale: 170,000 tons of nickel sulphate and 7,500 tons of cobalt sulphate per year.

New projects in progress

The development of the battery cluster is one of the main tasks of Finnish Minerals Group. Terrafame’s battery chemical plant project fits the company’s goals perfectly.

– We are an active owner and developer of selected companies. Our goal is to increase the processing rate of battery minerals in Finland and channel more capital into the industry, Hietanen says.

The company obtained a capital of EUR 46 million from the Finnish Government for developing the mining and battery industry. In its investment activities, Finnish Minerals Group works together with private investors who believe in the opportunities offered by the industry in this digitalising world.

In addition to Terrafame, Finnish Minerals Group is the shareholder of Keliber Oy, Ferrovan Oy and Sotkamo Silver Oy.

Keliber aims to start the production of lithium carbonate in the Ostrobothnia region during the next few years. In summer 2018, the company published its final profitability report, according to which the lithium project is clearly profitable.

Ferrovan is planning to open a plant in Raahe to manufacture vanadium from waste metal produced at steel mills.

Vanadium is used as a blend component in high-strength steels and as a catalyst in the chemical industry. New energy solutions help to increase demand, as vanadium is used as an element in redox flow batteries. Batteries store electricity in grids where energy is produced using wind or solar power.

– Ferrovan’s project is an excellent example of the principles of the bioeconomy, Hietanen says.

The entire value chain under control

Finland is in an excellent position to become a significant producer of battery minerals and chemicals in Europe.

– Finland is the largest producer of nickel and, when the Keliber mine starts its production, the only producer of lithium in the EU. We are also the only EU state with cobalt production.  What is more, Finland has potential manganese and graphite deposits.

In the value chain of battery making, the manufacture of battery chemicals follows the production of raw materials. Of all the companies operating in Finland, Norilsk Nickel Harjavalta makes nickel sulphate and Freeport Cobalt Oy produces cobalt sulphate and other cobalt compounds used in batteries. Keliber aims to produce lithium carbonate and hydroxide.

Batteries are assembled by a number of companies, Valmet Automotive being the largest with its car assembly plant in Uusikaupunki.

– Nearly the entire value chain, from the production of raw materials to their use and recycling, is represented. However, we do not have the middle stage involving cathodes and their pre-cursor materials or cell manufacturing. However, several development projects are underway to fill this gap, says Hietanen.

The strong and versatile cluster allows companies to be based close to raw material producers and to set up efficient supply chains.

– The fairly low price of energy supports the production of battery minerals and chemicals. We also have the competence and people we need.

According to Hietanen, the industry inevitably also needs foreign investors and businesses with the right experience and expertise in order to develop.

– The market is growing fast. Annual sales of electric cars in Europe are estimated to reach five million in 2030. The currently planned production volume of battery capacity is not even close to meeting the demand.

Booming demand for batteries is a challenge

Finnish Minerals Group is an active member of the  EU Battery Alliance,  which is preparing a strategic action plan for improving battery markets in Europe.

– A key goal of the EU Battery Alliance is to help the Commission to set up proper financial instruments to support companies to invest in production plants and to develop their operations.

According to Hietanen, Finnish Minerals Group can participate in profitable battery mineral projects in Finland as a partner and partial financier. However, the company does not seek to become the main financier in projects.

In addition to Finnish Minerals Group, the Finnish battery cluster, the opportunities of companies and expertise in the field are being developed at universities and research institutions, such as the Geological Survey of Finland (GTK) and VTT Technical Research Centre of Finland. Business Finland creates new growth by helping companies to expand internationally and by supporting and funding innovation.

– I’m certain that Finland has a lot to give to develop battery operations in Europe. To maintain the competitiveness of the European automotive industry, we need to have a functional battery cluster that is able to respond to the growing demand for batteries,  Hietanen says.

Terrafame produces metals that are used, for example, for stainless steel and electric vehicle batteries.