In a move to secure its cobalt supply for lithium batteries, Korea’s LG Chem has agreed to build two joint ventures with China’s Zhejiang Huayou Cobalt. The JVs are expected to start producing 40,000t a year of precursors and cathodes from 2020.
In order to make this happen, LG Chem said it would raise a total of 239.4 billion won (over 180M euros) by 2020 to set up the joint ventures in China. Once production of precursor and cathode materials will be up and running, LG Chem plans to use the battery materials for its battery plants in China and Poland.
JV partner Huayou Cobalt is among the world’s biggest cobalt producers and made 20,000 tons of cobalt in 2017 alone.
One joint venture is to make precursors from cobalt, manganese and nickel. When these precursors are combined with lithium, they become cathodes, which will happen at the second facility. The factory for precursors will be built in Quzhou, in which LG will hold a 49 percent stake. The cathode production will take place in Wuxi in Jiangsu province, where the Koreans will hold a 51 percent stake.
While the joint ventures will start producing the battery materials from 2020 with an estimated annual capacity of 40,000 tons for about 400,000 electric vehicles, they say the capacity can be increased to up to 100,000 tons depending on future demand.