Hyundai Motor Group has entered into a Memorandum of Understanding (MOU) with Korea Zinc, a leading non-ferrous metal smelting company based in Korea. The collaborative agreement sets the groundwork for a comprehensive partnership across the nickel value chain, with the shared goal of advancing the EV industry’s critical raw material supply.
The MOU signing ceremony, graced by the presence of Heung-soo Kim, Executive Vice President and Head of Global Strategy Office at Hyundai Motor Group, and Ki Duk Park, President and Co-CEO of Korea Zinc, marks a significant milestone in the partnership. The strategic collaboration encompasses various facets, including joint sourcing of nickel raw materials, processing of these materials, ensuring a consistent supply of processed nickel and battery components, and venturing into new avenues such as battery recycling.
Both entities are resolute in their efforts to establish a stable supply chain for nickel, a pivotal element for the production of EV batteries. In line with this objective, Hyundai Motor Group and Korea Zinc have laid out plans for joint procurement of nickel raw materials and investments in mine development initiatives to meet the requirements of the International Raw Material Agreements (IRA).
This collaborative move aligns seamlessly with Hyundai Motor Group’s commitment, revealed earlier in April, to assert its dominance in the global EV market by producing 3.64 million EVs. The ambitious roadmap positions the Group among the top three global EV manufacturers by 2030. To propel this agenda, Hyundai Motor Group is strategically prioritizing the acquisition of key raw materials such as nickel and lithium. The collaboration with Korea Zinc signifies the Group’s proactive approach in forming alliances with global partners specializing in raw material procurement, processing, and battery material production.
Leveraging Korea Zinc’s expertise in smelting non-ferrous metals, particularly zinc and silver, the company took a significant step forward in the EV battery sector by establishing a subsidiary dedicated to nickel sulfate production for EV batteries in 2017. The company’s focus on nickel expansion is underscored by its plans to establish a subsidiary for EV battery precursor production and the imminent construction of a nickel smelter in Ulsan’s Industrial Complex later this year.
The anticipated nickel supply from this partnership is slated to commence in 2026. By 2031, Hyundai Motor Group envisions sourcing 50 percent of the nickel required for IRA-compliant EV battery production from the Korea Zinc partnership. This secured supply is not only expected to meet the regulatory stipulations of the European Union’s Critical Raw Material Act (CRMA) but also align with other Environmental, Social, and Governance (ESG) standards related to regional EV production.
As an integral aspect of this collaborative endeavor, HMG Global, an overseas joint venture established by Hyundai Motor, Kia, and Hyundai Mobis, intends to acquire a 5 percent stake in Korea Zinc. The transaction entails a share price of approximately KRW 504,333 per share, equating to a total transaction value of around KRW 527.2 billion. The acquisition is scheduled for September 12th, with share transfers subjected to a one-year restriction period following the purchase.
In conjunction with the share acquisition, Hyundai Motor Group has secured the right to propose a non-executive director for Korea Zinc. This multifaceted approach aims to fortify the strategic ties between the two entities, further enhancing cooperation across the EV business value chain.
