Gwangyang City Signs 600 Billion KRW Investment Agreement with POSCO Chemical

Establishment of a Precursor Production Plant with an Annual Capacity of 100,000 Tons, a Key Material for Cathode Active Materials, by 2026

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] Gwangyang City, Jeollanam-do, announced that it is emerging as a production hub for key materials of secondary batteries, which are attracting attention as future new growth engines.

On the 7th, at the city hall situation room, an investment agreement (MOU) worth 600 billion KRW was signed for the establishment of a precursor production plant between POSCO Chemical Co., Ltd. CEO Min Kyung-jun, Jeollanam-do Governor Kim Young-rok, Gwangyang Mayor Jung Hyun-bok, Gwangyang Bay Area Free Economic Zone Authority Director Song Sang-rak, Yeosu Regional Maritime Affairs and Fisheries Office Director Cho Shin-hee, and Yeosu Gwangyang Port Authority President Park Sung-hyun.

With this investment, POSCO Chemical will complete precursor production facilities on an industrial complex site of approximately 60,000 pyeong located in Gwangyang City by 2026, and is expected to create employment for more than 100 people.

A precursor refers to a substance at a stage before becoming a specific material in any metabolism or reaction. In secondary batteries, it means a material composed of nickel, cobalt, and manganese, which are the main raw materials of cathode active materials. When lithium is combined with the precursor, it becomes the cathode active material, a key material of secondary batteries.

POSCO Chemical plans to increase the self-sufficiency rate of precursors to over 60% by 2025 through internalizing precursor production, which has so far depended on imports.

Thus, Gwangyang City is completing a full value chain of key secondary battery materials by having a precursor production plant with an annual capacity of 100,000 tons, following the cathode active material plant with an annual capacity of 90,000 tons and the lithium hydroxide manufacturing plant with an annual capacity of 43,000 tons. It is expected to establish a system that directly supplies raw materials to precursor manufacturing facilities in connection with the recycling business launched in May last year.

Jung Hyun-bok, Mayor of Gwangyang City, said, “The large-scale investment this time holds great significance as it provides a good opportunity to diversify the industrial structure of the region and transition to future-oriented industries in Gwangyang City, which has grown together with POSCO for over 30 years.”

He added, “Following this investment, we ask for much interest and cooperation so that POSCO’s future core businesses can continue to invest in Gwangyang City.”

Meanwhile, as of March 7, Gwangyang City has attracted investments of 1.3945 trillion KRW and 240 jobs from seven companies.

Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik hss79@asiae.co.kr

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