LG Chem & Huayou to build cathode material plant in South Korea
The South Korean chemical company LG Chem is joining forces with the Chinese company Huayou Cobalt to build a factory for nickel, cobalt and manganese cathode precursor materials in South Korea.
Construction of the new factory at the Saemangeum National Industrial Complex is scheduled to begin this year. Commissioning of the first phase with an annual production capacity of 50,000 tonnes of the so-called precursor material is planned for 2026. In a second phase, the output is to be doubled to 100,000 tonnes, which is enough for the cathodes of more than one million electric vehicles with a battery capacity of 75 kWh, according to LG Chem. The site is located about 230 kilometres southwest of Seoul.
With the letter of intent announced for 19 April, LG Chem intends to integrate parts of the upstream value chain into its business. The investment will enable it to refine metals domestically, which will help expand its production capacity for upstream products and further stabilise raw material supply in light of the changing situation in the global supply chain for battery materials, the South Korean company says.
Under the agreement, LG Chem and Huayou Cobalt plan to establish a joint venture and invest a total of 1.2 trillion won in the construction of the plant by 2028, the equivalent of about 830 million euros. According to the South Korean company, the plant will also include a metal refinery for the production of metal sulphates, which are considered elementary components for the production of the cathode precursor material.
LG Chem describes the Saemangeum industrial complex with its nearby port as an ideal location. The site is expected to be around 330,000 square metres and will be expandable at a later date. “We will reinforce our supply chain through vertical integration of cathode materials by investing in the Saemangeum precursor plant,” stated 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.”
The collaboration with Chinese raw materials giant Huayou does not come about by chance. LG Chem had already established another joint venture with B&M, a subsidiary of Huayou Cobalt, in mid-2022 to produce cathode materials. The joint venture, 51 per cent owned by LG Chem, is expected to 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. Both partners will invest the equivalent of up to 377 million euros by 2025.
The Chinese company is one of the most important suppliers of battery raw materials worldwide. The company has numerous partnerships with carmakers and battery cell manufacturers – for example, two joint ventures are to be established with VW in China.