[NEWS IN FOCUS] Battery makers invest in materials
LG Energy Solution, a wholly owned subsidiary of LG Chem, said Tuesday it bought 7.5 percent of Australia-based battery materials company Queensland Pacific Metals (QPM), which produces nickel and cobalt. It will pay 12 billion won ($10.7 million).
QPM, founded in 2007, is constructing a battery materials factory in Queensland through a 100 percent-owned subsidiary, Townsville Energy Chemicals Hub. The factory is expected to produce nickel sulphate and cobalt sulphate from the latter half of 2023.
QPM will supply LG Energy Solution with 7,000 tons of nickel and 700 tons of cobalt annually for 10 years from the end of 2023.
“The latest deal will help LG Energy Solution preemptively secure core battery materials amid growth in the electric vehicle battery market,” LG Energy Solution said in a statement Tuesday.
Electric vehicle (EV) batteries have four core components: cathodes, anodes, electrolytes and separators.
Cathodes account for 40 percent of a battery's cost and their quality plays an important role in the quality of the battery. Nickel, cobalt and manganese are core materials in cathodes.
Demand for EV batteries is expected to grow by more than 60-fold in the next 30 years, according to market tracker Statista.
LG Chem invested 40 billion won in Chinese copper foil manufacturer Jiujiang DeFu Technology in May to ensure supplies of the core material in anodes for its battery-making subsidiary LG Energy Solution.
Early this year, SK Innovation agreed to form a joint venture with Chinese battery maker EVE Energy and battery materials company BTR to produce cathodes. The cathodes factory is expected to have annual production capacity of 50,000 tons, although the investment size wasn’t disclosed.
It is also relying on its subsidiary SK ie technology for supplies of separators. SK ie technology, which went public recently, decided to make a 1.1 trillion won investment to expand its separator factory in Poland. Separators account for 20 percent of a battery's cost.
Samsung SDI is also working on partnerships with materials manufacturers.
Last year, it formed a joint venture called EcoPro EM with Korean cathode producer EcoPro BM. Samsung SDI will invest 48 billion won and own 40 percent of the joint venture. EcoPro BM will invest 72 billion won and own 60 percent. The new company is building a cathode factory in Pohang, North Gyeongsang, which will start mass production next year.
Samsung SDI reportedly wants to make 50 of its own cathodes for EV batteries by 2023, up from the current 20 percent.
"Korea's EV battery industry relies heavily on imports when it comes to battery materials," said Park Chul-wan, an automotive engineering professor at Seojeong University.
"Securing stable supplies through joint ventures and other partnerships would be necessary to handle rising demand for EV batteries and control costs."
BY JIN EUN-SOO [email@example.com]