Posco Chemical to Supply GM with Cathode Materials Worth 14 Trillion Won

Additional Orders for High-Nickel Cathode Materials for Electric Vehicle Batteries
GM Joint Venture 'Ultium CAM' Also Signs 8 Trillion Won Local Production Contract

POSCO Chemical Cathode Material Gwangyang Plant Panorama

[Asia Economy Reporter Oh Hyung-gil] POSCO Chemical has secured an additional order for cathode materials, a core component of electric vehicle batteries, from the American automaker General Motors (GM).

POSCO Chemical announced on the 28th that it had signed a cathode material supply agreement with GM worth approximately KRW 13.7696 trillion. From 2023 to 2025, it will supply high-nickel cathode materials produced at its Gwangyang plant to Ultium Cells, a battery joint venture between GM and LG Energy Solution.

Cathode materials are key components that account for more than 40% of the battery cost and are made from lithium, nickel, and other elements.

In May, POSCO Chemical also signed a contract to supply cathode materials produced at the 30,000-ton annual capacity plant of 'Ultium CAM,' a joint venture established with GM in Quebec, Canada, to Ultium Cells for eight years starting in 2025. Based on last year's raw material prices, this contract is worth KRW 8.0389 trillion.

With this additional order, the total value of cathode materials ordered by GM from POSCO Chemical has exceeded KRW 21.8 trillion. POSCO Chemical operates a supply system with an annual capacity of 90,000 tons, combining 60,000 tons from the Gwangyang plant and 30,000 tons from the Canadian plant, and plans to expand production lines at its North American joint venture to respond to GM's electric vehicle business expansion and related orders.

Furthermore, the two companies plan to expand cooperation to build a global supply chain for core electric vehicle battery materials by establishing a precursor plant, expanding cathode material plants, and signing additional supply contracts for both cathode and anode materials, centered around their joint venture.

Additionally, on the 27th, POSCO Chemical held a board meeting and decided to invest KRW 326.2 billion to expand precursor production facilities for cathode materials with an annual capacity of 45,000 tons at the Gwangyang plant. The completion is targeted for 2024. Precursors are intermediate raw materials that account for more than 60% of the cathode material cost, manufactured by processing nickel, cobalt, manganese, aluminum, and others, playing a crucial role in the performance, profitability, and supply stability of cathode materials.

POSCO Chemical stated that it has received requests from North American customers to expand precursor production both in Korea and North America. This is aimed at addressing supply risks and high tariffs associated with Chinese-made precursors.

A POSCO Chemical official said, "We plan to expand precursor production capacity from 15,000 tons this year to 220,000 tons by 2025, increasing the current self-production ratio of 33% to over 64%. We will actively pursue investments to internalize precursor production at global mass production bases and major raw material sources, including Korea, the United States, and Indonesia."

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