Russia’s State-Owned Nuclear Company, Rosatom, Acquires Stake in Lithium-Ion Battery Company

On March 5, Renera LLC, the energy storage division of Rosatom’s TVEL Fuel Company, finalized a 49% equity acquisition of the South Korean-based technology company, Enertech International, Inc., which manufactures components for lithium-ion batteries.  The acquisition arrives in the context of increased supply chain competition for what has become a critical component of a wide variety of emerging industries spanning electric vehicles, energy grid storage infrastructure, commercial energy storage and military applications.

Despite being based in South Korea, Enertech International has been controlled by a Russian native, Boris Zingarevich, since 2012, when he bought the company’s U.S.-based parent entity, Ener1, during a period where that company reportedly faced financial distress.  This raised security concerns at the time for several reasons.  U.S. officials feared that the acquisition could facilitate the transfer of proprietary technology, particularly given Ener1’s relationship with the U.S. military.  Ener1’s U.S.-based subsidiaries have reportedly received research and manufacturing contracts from the U.S. Department of Defense pertaining to lithium battery applications in asset tracking and drone technologies.  Enertech International too has ties to the defense sector.  According to its website, as of 2019, the company produced lithium battery components for the Korean defense industry (specifically, for radio communications technology).  Zingarevich also reportedly has ties to former Russian prime minister and current Deputy Chairman of the Security Council, Dmitry Medvedev.

Rosatom has characterized Renera’s recent stake acquisition as part of its effort to invest in an indigenous supply chain regarding lithium-ion energy storage capacity.  Whereas, in the short-term, the deal is reportedly intended to help buttress Russia’s domestic capacity in this sector, TVEL has indicated a long-term strategy that includes leveraging Enertech’s technology to establish a foothold in the global market.  Indeed, in the context of this deal, TVEL’s head, Natalya Nikipelova, noted that the expansion of Russia’s domestic production capacity for lithium batteries opens up the possibility for exports.  She noted,

“First of all, we focus on the near abroad – CIS countries, and on the horizon of 2030 we set the task to occupy up to 10% of market share of lithium-ion storage devices in the countries of the Middle East, India, and the European Union.”

As part of Renera’s acquisition of Enertech, the companies also announced their intention to build a battery components manufacturing facility in Russia by 2030.  The first stage of the project is scheduled to begin in 2025.