Jungang D&M Signs Letter of Intent to Collaborate with Global No.1 Lithium Salt Company DFD... "Full Supply to North America"

Jungang D&M announced on the 10th that it has signed a letter of intent for cooperation with the world’s number one lithium salt manufacturer, DFD (Du-Fluoride Chemical), to build a lithium salt production plant within the Saemangeum National Industrial Complex.

With the signing of this letter of intent, the lithium salt production business being promoted by Enchem and Jungang D&M through IDEL is expected to become more solid. From the perspective of plant construction and mass production stabilization, the company explained that the participation of DFD, a global leading company, will create significant synergy in both technical and business aspects.

As movements to reorganize supply chains centered on domestic markets expand, such as the U.S. Inflation Reduction Act (IRA) and the European Critical Raw Materials Act (CRMA), securing core raw materials has emerged as a key competitive advantage for secondary battery companies. In this context, Enchem is actively striving to secure leadership in the lithium salt business with Jungang D&M for the vertical integration of the electrolyte value chain.

Jungang D&M plans to be the main operator of the lithium salt business, producing high-quality products stably in-house and supplying electrolytes to key global hubs including North America through Enchem’s global supply chain. DFD will participate in the project as a strategic partner with Jungang D&M and Enchem, contributing proven process technology and operational know-how.

DFD, listed on China’s A-share market, has a market capitalization of approximately KRW 3.6 trillion. The company possesses various know-how and differentiated process technologies required for lithium salt production, which demands advanced technology and faces high entry barriers due to environmental regulations.

Previously, since 2021, Enchem has signed a long-term contract with DFD to receive high-quality lithium salt supply, and the two companies have also established a joint venture (JV) in China to successfully operate related businesses. Notably, through the joint venture, Enchem secured a priority purchase right for a certain percentage of lithium salt.

A Jungang D&M official stated, “We have been conducting close consultations with DFD for cooperation since April this year,” adding, “With recent full-scale national support, the groundbreaking of the Saemangeum lithium salt plant and related projects have begun in earnest, and discussions on specific conditions have started.”

He continued, “We have finalized conditions regarding DFD’s equity investment and royalties at a level unaffected by current U.S. IRA regulations,” adding, “The annual 50,000-ton scale lithium salt project being promoted in Saemangeum by Enchem, Jungang D&M, and IDEL, including DFD, is expected to be entirely used in North America.”

In this regard, an industry insider from the secondary battery sector commented, “Cooperation with DFD is expected to be an important foundation for the localization of core raw materials for secondary batteries,” and added, “From the perspectives of Jungang D&M and Enchem, securing production and supply of core raw materials and materials will likely provide a definite advantage in the North American secondary battery market.”

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