South Korean chemical company, LG Chem, has teamed up with Chinese company, Huayou Cobalt, to construct a new factory for nickel, cobalt, and manganese cathode precursor materials in South Korea. The factory, which is set to be built at the Saemangeum National Industrial Complex, will commence construction this year with the first phase, an annual production capacity of 50,000 tonnes of precursor material, scheduled to be commissioned by 2026. The second phase will see production doubled to 100,000 tonnes, which is sufficient for the cathodes of more than one million electric vehicles.
This letter of intent will enable LG Chem to integrate parts of the upstream value chain into its business, which will aid in expanding its production capacity for upstream products and stabilise the raw material supply in light of the changing situation in the global supply chain for battery materials. LG Chem intends to refine metals domestically with the investment, which will help in this regard.
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LG Chem and Huayou Cobalt plan to create a joint venture and invest a total of 1.2 trillion won in the construction of the plant by 2028. The plant will also feature a metal refinery for the production of metal sulphates, which are considered fundamental components in the production of cathode precursor material. LG Chem states that the Saemangeum industrial complex, with its nearby port, is an ideal location for the factory.
“We will reinforce our supply chain through vertical integration of cathode materials by investing in the Saemangeum precursor plant,” said Shin Hak-cheol, CEO of LG Chem. “LG Chem will proactively respond to the global market’s fast pace and firmly establish ourselves as the world’s leading battery materials company.”
LG Chem and Huayou Cobalt already have a collaboration in place, with a joint venture established in mid-2022 to produce cathode materials. The joint venture, 51% owned by LG Chem, will start mass production of NCMA cathode materials with an annual capacity of 60,000 tonnes in the South Korean city of Gumi from the second half of 2024, with both partners investing up to 377 million euros by 2025.
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Huayou Cobalt is one of the world’s most important battery raw material suppliers, with numerous partnerships with carmakers and battery cell manufacturers. For instance, two joint ventures are to be established with Volkswagen in China. With this partnership, LG Chem has taken a significant step in solidifying its position as a leading battery materials company.
