GS Construction Invests 100 Billion KRW to Enter Lithium-Ion Battery Recycling Business

Location of Pohang Yeongilman 4 General Industrial Complex.

[Asia Economy Reporter Donghyun Choi] GS Engineering & Construction is entering a new business related to secondary battery recycling in response to the expansion of electric vehicle adoption. This is the first major corporate investment case since the designation of the Pohang Next-Generation Battery Recycling Regulatory Free Zone in July last year.

On the 9th, GS Engineering & Construction announced that at the Pohang Sports Complex Indoor Gymnasium, Vice Chairman Lim Byung-yong of GS Engineering & Construction, Governor Lee Cheol-woo of Gyeongbuk Province, and Mayor Lee Kang-deok of Pohang City held the "Pohang Regulatory Free Zone GS Engineering & Construction Investment Agreement Ceremony" attended by President Moon Jae-in.

At this investment agreement ceremony, GS Engineering & Construction announced its investment plan for the secondary battery recycling business on a site of approximately 120,000㎡ within the recycling regulatory free zone in the Yeongilman 4 General Industrial Complex in Pohang. GS Engineering & Construction will invest about 100 billion KRW in the first phase by 2022. They plan to establish and operate facilities capable of producing 4,500 tons annually of valuable metals such as nickel, cobalt, lithium, and manganese from secondary batteries. Subsequently, they revealed plans to expand the business to an annual scale of 10,000 tons in the second phase of investment and to advance into upstream and downstream industries.

GS Engineering & Construction explained that through battery recycling facilities, they will recover key materials from used secondary batteries to prevent resource waste and environmental pollution, while securing materials that are mostly dependent on imports, thus achieving import substitution effects. In particular, the battery recycling industry is gaining attention as a promising next-generation business in advanced countries due to the expansion of electric vehicle adoption. According to Bloomberg, by 2040, more than half of new cars and one-third of all vehicles worldwide will be electric vehicles, and by around 2050, the battery recycling market is expected to grow to approximately 600 trillion KRW.

Furthermore, according to research related to domestic electric vehicle adoption and battery replacement cycles, the annual amount of secondary batteries generated is estimated to reach about 5.76 million units, with 10,000 units in 2024, 100,000 units in 2031, and 690,000 units in 2040. Also, since the cost proportion of key battery materials accounts for about 40% of the total, the business viability of the recycling industry is considered very high.

GS Engineering & Construction plans to secure a new growth engine through investment in next-generation battery recycling-related businesses. According to the actual GS Engineering & Construction employee status, about 90% of all employees are engineers, and among them, engineers in the fields of electrical and electronics, chemistry, machinery, and materials account for more than half. Having technical expertise with experience in chemical plant construction, they decided to enter the next-generation battery recycling business. In particular, since the key to the success of the business lies in how much the purity of metals recovered from batteries can be increased, it is expected that they will secure technological capabilities in this area.

GS Engineering & Construction expects that the first phase of investment alone will create about 300 high-quality local jobs, and anticipates that employment will increase with future investment expansion, contributing to the revitalization of the local economy.

Vice Chairman Lim Byung-yong of GS Engineering & Construction stated, "Through this investment, we will secure the best process technology and products with international competitiveness, achieve regional economic revitalization through job creation, and simultaneously reduce dependence on imports of battery materials. Taking this investment as an opportunity, GS Engineering & Construction will strive to expand new businesses into various fields by utilizing abundant human resources."

This content was produced with the assistance of AI translation services.