LG Energy Solution Acquires 7.5% Stake in Australian Nickel and Cobalt Refining Company

LG Energy Solution Acquires QPM Stake for About 12 Billion KRW... Signs Long-Term Purchase Agreement
Stable Supply of Key EV Battery Raw Materials: 7,000 Tons of Nickel and 700 Tons of Cobalt Annually

[Asia Economy Reporter Hwang Yoon-joo] LG Energy Solution (LG EnSol) has decided to acquire shares in an Australian smelting specialist company to secure competitiveness in key battery raw materials.

LG EnSol announced on the 8th that it participated in a paid-in capital increase of the Australian company 'QPM (Queensland Pacific Metals)', which produces key raw materials for electric vehicle batteries such as nickel and cobalt, acquiring a 7.5% stake. The acquisition amount is approximately 12 billion KRW.

Australian QPM, established in 2007, is a smelting specialist company operating a wholly-owned subsidiary called the 'TECH (Townsville Energy Chemicals Hub) Project.' The TECH project is constructing a plant in the northern Queensland region of Australia, aiming to produce nickel sulfate and cobalt sulfate for electric vehicle batteries using an eco-friendly new process starting in the second half of 2023.

Through this contract, LG EnSol will stably receive 7,000 tons of nickel and 700 tons of cobalt annually for 10 years starting from the end of 2023. It is expected to proactively respond to supply issues of key battery raw materials amid the growth of the battery market.

According to market research firm CRU, global nickel demand is projected to increase from 2.6 million tons this year to 3.1 million tons in 2024. Among the four key materials for electric vehicle batteries (cathode, anode, electrolyte, separator), cathode materials account for 40% of battery material costs. In particular, nickel, a major raw material in cathode materials, plays an important role in extending the driving range of electric vehicles, with nickel content in cathode materials exceeding 80% in high-capacity lithium-ion batteries.

LG EnSol plans to gradually increase the proportion of high-nickel NCMA (nickel, cobalt, manganese, aluminum composition cathode material) batteries for third-generation next-generation electric vehicles, which will begin full-scale production in the second half of this year. High-nickel NCMA batteries increase the nickel content in cathode materials, significantly reduce expensive cobalt, and add affordable aluminum to enhance stability, output, and price competitiveness.

Kim Myung-hwan, Chief Production and Purchasing Officer (CPO, President) of LG EnSol, said, "With the rapid growth of the electric vehicle battery market, securing key raw materials is becoming one of the important business competencies," adding, "We will continue efforts to build a solid value chain from raw materials to materials and batteries."

Meanwhile, POSCO Group also invested about 5 billion KRW in this paid-in capital increase, acquiring a 3.2% stake in QPM, and secured the right to receive 3,000 tons of nickel and 300 tons of cobalt annually for 10 years starting from the end of 2023.

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