German chemicals company BASF has signed a deal with Russia’s nickel and palladium mining firm Nornickel to form a strategic cooperation to meet the growing demand for battery materials that are used in electric vehicles.

The parties have also signed an agreement that will see Nornickel supply nickel and cobalt feedstocks from its metal refinery to BASF.

The German company has unveiled plans to establish a battery materials production plant in Harjavalta, Finland, in proximity to the nickel and cobalt refinery owned by Nornickel.

BASF’s investment in the proposed plant is part of its €400m phased investment plan disclosed last year. The firm expects the plant to begin production in 2020, supplying battery materials to around 300,000 full electric vehicles per year.

BASF Catalysts division president Kenneth Lane said: “With the investment in Harjavalta, BASF will be present in all major regions with local production and increased customer proximity further supporting the rapidly growing electric vehicle market.

“Combined with our Nornickel cooperation, we are creating a strong platform that connects the efforts between industry leaders in raw material supply and battery materials technology and production.”

“BASF will be present in all major regions with local production and increased customer proximity.”

The company is also exploring additional locations in Europe to set up more production plants in support of the EU Commission’s agenda towards a European battery production value chain.

Nornickel Sales, Procurement and Innovation senior vice-president Sergey Batekhin said: “The agreement is an important element of Nornickel’s broader strategy to expand its presence in the global battery materials market and establish long-term cooperation with leading producers of cathode active materials.”