Domestic Battery Companies Expected to Secure Materials Easily and Achieve Import Substitution Effects

Gyeongbuk Next-Generation Battery Recycling Special Zone, Urban Mine Demonstration Begins
Regulatory Free Zone Attracts 555.2 Billion KRW Investment from 10 Companies

[Asia Economy Reporter Kim Jong-hwa] The urban mining business, which extracts battery materials such as nickel, manganese, and cobalt?entirely dependent on imports?from used batteries is expected to be in full swing. Accordingly, domestic battery companies are expected to benefit from import substitution effects as securing materials becomes easier.

The Ministry of SMEs and Startups and Gyeongsangbuk-do announced that the Gyeongbuk (Pohang) 'Next-Generation Battery Recycling Special Zone' has produced visible results, and with the smooth progress of preliminary preparations such as fulfilling the conditions for the 'Reuse-Impossible Battery Recycling Demonstration,' full-scale demonstration began on the 30th.

Until now, there was no standard to measure the value of used batteries from electric vehicles, so when drivers returned their electric vehicles to the mayor after scrapping, the batteries were only stored at facilities operated by the Korea Environment Association and could not be distributed (sold).

Batteries are a core resource ushering in the era of eco-friendly future vehicles, and the global market size is expected to surpass the memory semiconductor market by 2025 (market research firm SNE Research). However, since related standards have not been established domestically, companies have faced difficulties entering the initial market.

Accordingly, Gyeongbuk (Pohang) was selected as the first domestic battery special zone in July last year and is preparing safety standards and detailed guidelines for all processes?from the initial stage of separating and storing used electric vehicle batteries with high residual value to performance evaluation, grading, reuse, and recycling.

Therefore, an economic extraction method to extract battery materials (nickel, manganese, cobalt, etc.)?entirely dependent on imports?from used batteries is being established, and the extracted valuable metals can be recycled as battery raw materials. This is expected to improve the flexibility of material procurement for domestic battery companies and have excellent import substitution effects.

In response to the efforts of the special zone, companies have also responded positively. The Blue Valley Industrial Complex, where the special zone is located, has sold 100% of its first-phase allotments, and large and medium-sized companies are participating in the special zone project in cooperation with small and medium enterprises. The number of special zone operators has more than doubled since designation. In new investments, GS Construction has invested 100 billion KRW, and investments from special zone operators and related companies continue.

EcoPro GEM, a special zone operator, is investing 86 billion KRW to establish a precursor production line factory, and New Tech LIB is investing 13 billion KRW in constructing an anode active material factory. In total, seven special zone operators plan to invest 220.2 billion KRW. Furthermore, thanks to the special zone designation, investments and relocations of battery-related companies have also achieved results. POSCO Chemical has decided to invest 250 billion KRW by 2021 to build a secondary battery anode material factory.

Kim Hee-cheon, head of the Regulatory Free Zone Planning Group at the Ministry of SMEs and Startups, said, "Pohang, the 'City of Steel' that supported the growth of manufacturing and led the domestic steel industry, is developing into a leading battery city thanks to the achievements of the special zone. We will actively support the regulatory free zone to become an advanced base for future strategic industries and a key mechanism for regional balanced New Deal."

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