POSCO Chemical to Expand China Battery Material Joint Factory Sixfold

Cathode Material and Precursor Plant Annual Production Increased from 5,000t to 35,000t
281 Billion KRW Investment... Construction in Second Half of This Year, Mass Production in 2023

Posco Chemical and China's Huayou Cobalt operate a cathode material production joint venture in Zhejiang Province, China.

[Asia Economy Reporter Choi Dae-yeol] POSCO Chemical has decided to invest 281 billion KRW in its joint venture in China to expand its battery material factory.

On the 25th, the company announced that its board of directors decided to invest 176.9 billion KRW and 104.1 billion KRW respectively in the cathode active material and precursor joint ventures (Zhejiang Pohwa and Zhejiang Huapo) operated by POSCO Group and Huayou Cobalt in China. The joint ventures plan to increase their current production capacity of about 5,000 tons each to 35,000 tons. Construction will begin in the second half of this year, with plans to produce high-nickel cathode active materials for electric vehicles starting in 2023. The 35,000 tons of cathode active material can be used for approximately 390,000 60kWh electric vehicle batteries.

Cathode active material is one of the four core battery materials and is a crucial component that determines battery performance and capacity. It accounts for about 40% of the battery manufacturing cost. Precursor is an intermediate material for cathode active material, produced by mixing raw materials such as nickel, cobalt, manganese, and aluminum. As battery demand has increased recently, securing raw materials has become important.

POSCO and Huayou Cobalt established a cathode active material and precursor production corporation in Tongxiang City, Zhejiang Province, China, in March 2018 and have been operating the factory. The company emphasized that China is a key strategic market, accounting for 48% of POSCO Chemical's secondary battery material sales last year. With the expansion of electric vehicle adoption in China, securing local battery materials has become critical, and POSCO Chemical has laid the foundation to increase local customers. The cathode active materials produced by the joint venture will be supplied to local Chinese battery companies and Korean battery companies operating in China.

The company stated, "By expanding the precursor factory, we will enhance the stability of securing key raw materials for cathode active materials and increase internalization rates, while strengthening our partnership with Huayou Cobalt." Huayou, which has a cooperative relationship with POSCO domestically and internationally, is the world's largest cobalt company and owns numerous raw material mines for secondary battery materials. Its annual cobalt production is about 40,000 tons.

The company also revealed plans to establish local subsidiaries in the United States and Europe following China. The goal is to build a supply chain of 160,000 tons domestically and 110,000 tons overseas by 2025. Min Kyung-jun, CEO of POSCO Chemical, said, "We will accelerate investment to proactively respond to the rapidly growing market and lead the battery industry supply chain, which is being reorganized by global regions."

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