POSCO Group Breaks Ground on High-Purity Nickel Refinery... Strengthening the Secondary Battery Material Value Chain

Supply of 500,000 Electric Vehicles Possible
Reducing Dependence on Chinese Imports to Respond to IRA

Seoul POSCO Center exterior. Photo by POSCO Group

[Asia Economy Reporter Choi Seoyoon] POSCO is starting construction of a high-purity nickel refining plant for secondary batteries and will begin direct production to respond to the rapidly growing battery demand driven by the rapid growth of the eco-friendly vehicle market.

POSCO Group announced on the 14th that it held a groundbreaking ceremony for the high-purity nickel refining plant at the Gwangyang Steelworks. About 50 people, including POSCO Group executives and engineers from engineering firms, attended the ceremony.

In his commemorative speech, Lee Jutae, Head of Purchasing and Investment at POSCO, said, “Nickel is a key raw material that determines the performance and capacity of electric vehicle batteries. Due to the rapid growth of the electric vehicle market and the advancement of battery performance, demand for high-purity nickel is rapidly increasing. With this investment, POSCO Group will establish a system to directly produce and supply the entire process from ore to high-purity nickel, solidifying its position as a global leader in the secondary battery materials market.”

The high-purity nickel refining plant, with an annual capacity of 20,000 tons, being constructed by POSCO is capable of producing enough for 500,000 electric vehicles. It will be built on a 74,000 m² site within the Gwangyang Steelworks, with completion targeted for the second half of 2023.

Nickel used in battery cathode material manufacturing is input in the form of nickel sulfate (nickel content 22.3%), which is high-purity nickel with added sulfuric acid. Converting 20,000 tons of high-purity nickel into secondary battery-grade nickel sulfate by weight corresponds to approximately 91,000 tons.

POSCO’s high-purity nickel refining project involves wet refining nickel mats with 75% nickel purity to produce high-purity nickel with over 99.9% purity for secondary batteries. POSCO Group’s SNNC produces nickel mats by smelting and de-ironing ferronickel, and POSCO refines the nickel mats into high-purity nickel to supply secondary battery material companies such as POSCO Chemical. This reduces dependence on imports from China and establishes a favorable position to respond to the Inflation Reduction Act (IRA).

In 2006, POSCO Group proactively invested in a nickel mine in New Caledonia to establish a stable nickel supply chain and founded the raw material corporation NMC (Nickel Mining Company). NMC supplies nickel ore, and SNNC produces ferronickel, the STS raw material.

With this investment, POSCO has expanded into the high-purity nickel business for secondary battery materials and plans to strengthen the value chain of the secondary battery materials business by establishing the first domestic system to produce and supply from ore to high-purity nickel.

To achieve carbon neutrality, global battery companies are competing fiercely to secure raw materials such as lithium and nickel for secondary batteries, and the importance of building supply chains in the secondary battery materials sector is increasingly emphasized worldwide.

According to reports from global market research firms such as SNE Research, the global electric vehicle market is expected to grow to over 59 million units by 2030, and the demand for high-purity nickel, an essential raw material for high-capacity battery cathode materials, is also expected to grow rapidly at an average annual rate of about 20%, with supply shortages anticipated from 2025. In response, POSCO Group proactively decided to invest in the high-purity nickel refining business, a core secondary battery material, in July last year.

Meanwhile, even under an emergency management system, POSCO Group is actively investing in core growth businesses such as secondary battery materials and hydrogen projects to enhance the group’s future competitiveness. In the secondary battery materials business sector, the plan is to establish a production and sales system by 2030 for 610,000 tons of cathode materials, 320,000 tons of anode materials, 300,000 tons of lithium, and 220,000 tons of nickel, aiming to achieve sales of 41 trillion won.

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