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.