Posco Chemical to Supply Cathode Materials to LG Energy Solution-GM Joint Venture

From Lithium to Cathode and Anode Materials... Completing the Secondary Battery Material Value Chain
Targeting 20% Global Market Share by 2030
POSCO Decides on Largest Ever 1 Trillion KRW Paid-in Capital Increase for POSCO Chemical

[Asia Economy Reporter Hwang Yoon-joo] POSCO Chemical will supply cathode materials to 'Ultium Cells,' the electric vehicle battery joint venture between LG Energy Solution and GM. This marks the beginning of the full-scale realization of POSCO Group's investments in secondary battery materials.

On the 9th, POSCO Chemical announced that it will supply cathode materials for electric vehicle batteries in line with Ultium Cells' production schedule, and the mass-produced battery cells will be applied to GM's Ultium electric vehicle platform. The two companies are also in separate discussions regarding the supply of anode materials.

Ultium Cells is an electric vehicle battery cell joint venture established last year with a 50-50 stake by GM, the No. 1 automaker in the United States, and LG Energy Solution, the world's No. 1 battery company. A factory is currently under construction in Lordstown, Ohio. The two companies have announced plans to invest a total of 2.7 trillion KRW in phases to secure a production capacity of over 30 GWh.

◆ POSCO Drives Battery Material Business through POSCO Chemical

Through this supply, POSCO Chemical is expected to increase its market share by supplying cathode materials to the global market and enter a full-fledged growth trajectory. Ultium Cells will also be able to secure high-quality battery materials stably.

This expansion of POSCO Chemical's customer base can be seen as the fruition of POSCO Group's investment in the secondary battery materials business, which it is focusing on as a next-generation growth engine alongside its core steel business. POSCO Group is building a value chain for the secondary battery materials business based on differentiated competitive advantages such as integrating cathode and anode material businesses centered on POSCO Chemical, investing in capacity expansion, developing next-generation materials, and securing raw materials like lithium.

In particular, last month, POSCO decided on a paid-in capital increase of 1 trillion KRW, the largest ever for an affiliate, signaling plans to focus on growing the secondary battery materials business.

With such group-level support, POSCO Chemical is aggressively expanding its mass production capacity. Currently, it operates an annual cathode material production system of 40,000 tons, and this year alone, it has started investing about 600 billion KRW in the Gwangyang plant to increase production capacity by 60,000 tons. Once the Gwangyang plant expansion is completed, POSCO Chemical will secure an annual domestic production capacity of 100,000 tons from 2023.

◆ Preparing for Mass Production of Next-Generation Electric Vehicle Battery Materials... Aiming to Become a Global Secondary Battery Material Company

The expanded facilities will mass-produce next-generation electric vehicle materials such as high-nickel NCMA cathode materials to meet orders from global battery and automakers, including Ultium Cells.

Cathode materials are key components that determine battery capacity and output. POSCO Chemical supplies high-quality NCM cathode materials for electric vehicles to the market. It has also completed the development of NCMA cathode materials, which enable driving over 500 km on a single charge and offer high stability, making them suitable for high-performance electric vehicle batteries, thus preparing for the advent of the next-generation electric vehicle market.

POSCO Group's assets and capabilities related to the secondary battery materials business also strengthen POSCO Chemical's differentiated competitiveness. POSCO secured lithium ore supply rights through the acquisition of salt lakes in Argentina and equity investment in Australian lithium mines to produce lithium, a key raw material for cathode materials. Recently, it was confirmed that the lithium reserves in the Argentine salt lakes are six times larger than initially estimated at the time of acquisition. POSCO Chemical has secured R&D capabilities through the Secondary Battery Materials Research Center and is also known to be promoting next-generation battery recycling businesses.

Another strength is that POSCO Chemical is the only company in Korea that simultaneously produces the two major battery materials, cathode and anode materials, creating synergies in research and development, marketing, and process technology. Currently, POSCO Chemical holds an 11% global market share in anode materials, ranking fourth worldwide. Its subsidiary, PMC Tech, produces needle coke using coal tar, a steelmaking byproduct from POSCO, which gives it an advantageous position in developing artificial graphite anode materials.

POSCO Chemical plans to gradually secure mass production capacity by 2030, increasing cathode materials from the current 40,000 tons to 400,000 tons, and anode materials from 44,000 tons to 260,000 tons, aiming to achieve a 20% global market share in cathode and anode materials and annual sales of 23 trillion KRW.

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