POSCO Chemical to Establish a 100,000-ton Annual Precursor Production Plant in Gwangyang

Jeollanam-do and Gwangyang City Sign 600 Billion KRW Investment Agreement
Production Scale of 1.2 Million Electric Vehicle Battery Cathode Materials

POSCO Chemical signed an investment agreement for the battery precursor business with Jeollanam-do and Gwangyang City Hall on the 7th in Gwangyang City Hall, Jeollanam-do. Min Kyung-jun, President of POSCO Chemical (fourth from the left in the photo), Kim Young-rok, Governor of Jeollanam-do (third from the left), and Jung Hyun-bok, Mayor of Gwangyang (second from the left), are holding the investment agreement for a commemorative photo.

[Asia Economy Reporter Oh Hyung-gil] POSCO Chemical is accelerating efforts to strengthen its competitiveness in the battery materials sector by establishing a new plant capable of producing 100,000 tons per year of precursors used in electric vehicle batteries.

On the 7th, POSCO Chemical signed an investment agreement worth 600 billion KRW for the precursor plant with Jeollanam-do Province and Gwangyang City at Gwangyang City Hall.

The precursor plant, with an annual capacity of 100,000 tons, will be constructed in phases on a 200,000㎡ site in the Sepung Industrial Complex in Gwangyang City. The 100,000 tons of precursors is enough to produce cathode materials required for approximately 1.2 million electric vehicle batteries.

POSCO Chemical explained that the investment decision was made to secure raw material competitiveness in the cathode material business in response to the growth of the electric vehicle battery market and to seize market opportunities based on this.

Precursors are intermediate raw materials for cathode materials, which are key components of batteries, manufactured by processing nickel, cobalt, manganese, aluminum, and others. They account for more than 60% of the cost of cathode materials, making the stability of the raw material supply chain increasingly important and raising the necessity for domestic production. According to market research firm QY Research Korea, the localization rate of precursors was 13.9% as of 2020, with the domestic battery industry largely dependent on supplies from China.

POSCO Chemical plans to expand its precursor production capacity from 15,000 tons this year to 185,000 tons by 2025, increasing its self-production ratio from 33% to 67%.

Last year, POSCO Chemical entered into a joint venture with Huayou Cobalt to build a precursor plant in China with an annual capacity of 35,000 tons, and is expanding investments for precursor production in connection with POSCO Group’s raw material businesses such as nickel mining rights acquisition and recycling.

Upon completion of the precursor plant, it is expected to establish the entire value chain of the cathode material business within the Gwangyang Bay area and further enhance efficiency. In May of this year, Gwangyang will host the world’s largest single plant with an annual capacity of 90,000 tons of cathode materials. Additionally, POSCO Lithium Solution, which produces lithium raw materials, and POSCO HY Clean Metal, which supplies raw materials through spent battery recycling, have gathered as part of POSCO Group’s secondary battery materials business infrastructure.

Min Kyung-jun, CEO of POSCO Chemical, stated, "Together with Jeollanam-do and Gwangyang City, who are actively supporting the establishment of the battery industry ecosystem, we will complete the entire value chain of the cathode material business and lead the 'K-Battery' industry."

Posco Chemical is establishing a new plant capable of producing 100,000 tons per year of precursors used in electric vehicle batteries, accelerating efforts to strengthen competitiveness in the battery materials sector.

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