POSCO Takes First Step in Battery Recycling Business... Joint Venture with Chinese Partner to Begin Construction of Gwangyang Plant Within the Year

Jeollanam-do and Zhonghua You Cobalt Joint Venture
Eco-friendly Secondary Battery Recycling Agreement
120 Billion KRW Investment in Gwangyang Free Economic Zone
Establishment of Production Line Processing 10,000 Tons Annually

Choi Jung-woo, Chairman of POSCO. Photo by POSCO

[Asia Economy Reporter Choi Dae-yeol] POSCO has decided to actively promote its spent battery recycling business. It is building a value chain encompassing both upstream and downstream sectors related to secondary battery materials.

On the 28th, POSCO, Jeollanam-do Province, and China’s Huayou Cobalt held an investment agreement ceremony for an eco-friendly secondary battery recycling business at the Jeonnam Provincial Office. Huayou Cobalt is a company renowned for its technology in mineral refining and purification. Earlier in May, it formed a joint venture called POSCO HY Clean Metal with POSCO at a 65:35 ratio. Huayou also participated in a consortium with LG Chem and others for the secondary battery materials business in Indonesia.

The joint venture will process scrap from spent batteries of European battery factories locally into black powder and then ship it to Korea. Black powder is a black powder obtained by crushing and sorting lithium-ion battery scrap, containing key materials for secondary battery cathode materials such as nickel, lithium, cobalt, and manganese. This will be reused through a recycling process. They plan to invest 120 billion KRW in the Yulchon Industrial Complex in the Gwangyang Free Economic Zone to establish a production line capable of processing 10,000 tons annually. Construction will begin within this year. Expansion will also be considered depending on market conditions.

According to industry sources, the spent battery recycling business is estimated to account for 20% of raw material demand by 2030 alongside the growth of the electric vehicle market. The market size is also expected to reach 8 trillion KRW. As an eco-friendly resource circulation business, it is attracting global attention. POSCO recently started building a lithium hydroxide plant nearby with an annual capacity of 43,000 tons, enough to supply one million electric vehicles.

POSCO recently announced plans to further invest to establish an annual production system of 70,000 tons by 2023 and 220,000 tons by 2030. It is strengthening a comprehensive business model related to secondary battery materials, including directly securing lithium from salt lakes in South America acquired in the past, material processing, refining, and recycling. Globally, few companies have a value chain like POSCO Group’s in secondary battery materials and raw materials.

Jung Chang-hwa, head of POSCO’s New Growth Division, said, "We will secure technological leadership and global competitiveness in the eco-friendly battery recycling business through cooperation with Jeonnam Province and Huayou Cobalt," adding, "We will grow as a key material supplier in the secondary battery industry."

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