South Korea’s petrochemical and electronic material manufacturer, LG Chem announced its partnership on Monday with China’s Huayou Cobalt, a mining company specializing in the supply of cobalt material. With the new partnership, both companies will build a battery precursor factory in Korea’s Saemangeum National Industrial Complex which is situated 230 kilometres southwest of Seoul.
LG Chem has signed an initial agreement also comprehended as a memorandum of understanding (MOU) with the Huayou Cobalt corporation in presence of multiple local stakeholders. Some of these stakeholders include the Saemangeum Development and Investment Agency, Korea Rural Community Corporation (KRCC), and a few more.
As per LG Chem, they intend to strengthen the supply chain of secondary battery materials across the nation with the new plant and for that, they have pulled an investment plan worth $913.2 million or 1.2 trillion won. By the year 2028, both companies will be spending their $900 million plus budget over the Saemangeum-based precursor manufacturing structure.
The development of the Saemangeum precursor plant will begin this year. Originally, the plant has been split up into certain phases for convenience. The first phase comes with a marking up to the year 2026 when it’s anticipated for the Saemangeum plant to cross 50,000-ton annual production capability. From the next phase onwards, the annual production abilities are expected to double to 100,000 tons since by that time, the new plant will have new additional installations.
Under the new agreement, both LG Chem and Huayou Cobalt also look forward to building a refining facility for metal sulfates. In precursor production, metal sulfates play a vital role and it’s likely by the end of the final phase, there will be enough metal refiner to elicit these metal sulfates.
When it comes to locale and landscape, Saemangeum National Industrial Complex is the immaculate spot for constructing battery material-affiliated plants for various manufacturers ranging from SK On to EcoPro. This site has great sea route connectivity options all thanks to the Saemangeum port.
The presence of precursors has an explicit impact on electric vehicle (EV) production in a country. Precursors are essential ingredients for manufacturing units since they decide the exhibition of cathodes, a critical compound summed up in EVs.
With LG Chem’s new advent in the construction of a precursor plant, the company is about to gain qualifications that will let them refine metals and augment its precursor production within South Korea. Their dependence on foreign sources will be minimized especially in times when the global supply chain is disrupted and facing disarray brought about by growing multinational raw material prices.
South Korea imports about 80 percent of its lithium, manganese, as well as other rare earth minerals from China. While, 30 percent of krypton, xenon, and palladium come from Russia and Ukraine. In the past few years, Korea has accelerated its layout of materials companies.
In countering current trends of high pricing, South Korea is searching for alternatives in terms of technology along with its major battery makers. Korean companies are developing manganese batteries that can be more economical. Although the final design for such batteries has not been perfected yet and it’s still under development.