Johnson Matthey plc (JM; London) has been working to commercialize its range of high nickel cathode materials, principally for the automotive industry. Following a detailed review and ahead of reaching a number of critical investment milestones, JM concluded that the potential returns from the Battery Materials business will not be adequate to justify further investment.
Whilst demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers. Consequently, this is rapidly turning into a high-volume, commoditized market. In recent months, as JM was exploring strategic partnerships, it had become clear that its capital intensity is too high compared with other more established large scale, low cost producers.
The Board has therefore decided to pursue the sale of all or parts of this business with the ultimate intention of exiting. JM will move swiftly to determine the best outcome for all stakeholders and intend to make a further announcement as soon as possible.
JM is making good progress in its other growth areas, such as in hydrogen technologies, circularity and the decarbonization of the chemicals value chain.
Robert MacLeod, Chief Executive said: “While the testing of our eLNO battery materials with customers is going well, the marketplace is rapidly evolving with increasing commoditization and lower returns. We have concluded that we will not achieve the returns necessary to justify further investment.
“This decision will allow us to accelerate our investment and focus on more attractive growth areas, especially where we have leadership positions such as in hydrogen technologies, circularity and the decarbonization of the chemicals value chain.”