Posco Chemical to invest $240 mn on key EV battery materials plants in China.
Posco Chemical Co. will invest 281 billion won ($240.6 million) to build cathode and precursor plants in China, its first overseas production base for secondary battery materials business, to take the lead in the global markets for the two key electric vehicle (EV) battery materials.
The Korean secondary battery materials maker said, the two plants will roll out high-nickel cathodes and precursors with an annual production capacity of 30,000 tons, each, from 2023.
The new lines will be added to the company’s existing plants to produce the key EV battery materials under a joint venture run by steelmaker Posco and its local partner Huayou Cobalt in Zhejiang Province. The JV’s current annual production volume of cathodes and precursors is 5,000 tons, each.
Posco Chemical will spend 176.9 billion won on the cathode plant in exchange for shares in the cathode JV, which will up the total stake held by Posco Group to 60 percent. The rest of Posco Chemical’s investment will go to the precursor plant, which will increase Posco Group’s combined stake in the precursor JV to 40 percent.
Cathodes are one of the four key components of an EV battery, along with anodes, separators, and electrolytes. Precursors are raw materials used in manufacturing cathodes. The demand for the EV battery materials is set to rise further thanks to the burgeoning EV market.
Construction of the new plants is scheduled to begin in the second half of this year. Once the two plants start mass production in 2023 as planned, the company would be able to produce total 35,000 tons of cathodes per year in China, which are enough to power 390,000 electric vehicles with 60kwh battery packs, according to Posco Chemical.
The cathodes to be produced here will be delivered to local Chinese battery companies and Korean battery makers operating in China, the world’s largest EV market.
Posco Chemical said it aims to achieve cathode production capacity of 160,000 tons in South Korea by 2025. In July, the company already announced a 600 billion won investment to build a cathode plant with an annual capacity of 60,000 tons in Korea. It is also considering local operations in Europe and the US to bump up its cathode production in overseas to 110,000 tons by the same year.
Posco and Huayou Cobalt established two joint ventures for cathodes and precursors in Zhejiang Province in March 2018. Huayou Cobalt is the world’s largest supplier of cobalt, the key ingredient for lithium-ion batteries. It owns its own cobalt mine and nickel mine.
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Posco Chemical to invest $240 mn on key EV battery materials’ plants in China, August 26, 2021
