LG Energy Solution Secures Battery Raw Materials... Acquires 4.8% Stake in China's Great Power

Securing Key Raw Materials of Nickel and Cobalt

[Asia Economy Reporter Hwang Yoon-joo] LG Energy Solution is acquiring shares in a Chinese smelting specialist company to secure key raw materials for batteries.

On the 17th, LG Energy Solution signed a contract to acquire a 4.8% stake by participating in a paid-in capital increase of the Chinese company 'Greatpower Nickel & Cobalt Materials Co., Ltd.', which produces key raw materials for electric vehicle batteries such as nickel and cobalt. The acquisition amount is approximately 35 billion KRW.

Through the acquisition of shares in Greatpower and a long-term purchase agreement, LG Energy Solution will stably receive a total of 20,000 tons of nickel over six years starting from 2023. This quantity can supply about 370,000 high-performance electric vehicles (capable of driving over 500 km on a single charge). Greatpower, established in Shanghai, China in 2006, is a smelting specialist company currently constructing a local plant aiming for mass production of nickel sulfate for electric vehicle batteries in 2023.

With this contract, LG Energy Solution has secured additional stable supplies of nickel, a core raw material for batteries, enabling it to proactively respond to the rapidly increasing global battery demand based on strengthened core raw material competitiveness.

Among the four key materials for electric vehicle batteries (cathode, anode, electrolyte, separator), cathode materials increase battery capacity and output and account for about 40% of battery material costs. In particular, nickel is a key raw material for cathode materials; increasing its proportion raises energy density, thereby extending the driving range per charge of electric vehicles. Consequently, the trend of increasing 'high-nickel batteries' with a high nickel content is growing. For high-capacity high-nickel lithium-ion batteries, the nickel content in the cathode material exceeds 80%.

LG Energy Solution plans to begin full-scale production of third-generation next-generation high-nickel NCMA batteries for electric vehicles in the first half of next year and gradually increase their proportion.

High-nickel NCMA (nickel, cobalt, manganese, aluminum composition cathode material) batteries increase the nickel content in the cathode to 89-90%, reduce the expensive cobalt to below 5%, and add relatively inexpensive aluminum to improve stability and output while enhancing price competitiveness.

According to CRU, a global steel market research organization, worldwide nickel demand is expected to increase from 2.39 million tons in 2020 to 3.32 million tons in 2024.

Meanwhile, LG Energy Solution is focusing on securing key battery materials stably. Recently, it signed long-term purchase agreements for nickel and cobalt with Australian battery raw material developers Mine and QPM.

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