Posco Chem, GM to build cathode factory in Quebec

[POSCO CHEMICAL]

Posco Chemical and General Motors are building a $400 million high-nickel cathode materials factory in Quebec, Canada.

The announcement came three months after the companies formed a joint venture to build a cathode materials factory in North America for batteries for electric vehicles (EVs).

Construction on the factory will begin immediately with the goal of starting operations at the end of 2025. The facility will be located in Becancour in the southern part of Quebec. An estimated 200 workers will be employed, Posco chemical said.

Cathode materials represent some 40 percent of a battery's cost, and have expensive components like nickel and cobalt. They also play a key role in the performance of the battery.

The cathode materials that are produced will be sold to Ultium Cells, a 50-50 joint venture between General Motors and Korean battery maker LG Energy Solution that makes batteries for the Detroit-based automaker’s EVs.

Posco Chemical’s relationship with Ultium Cells started in 2020 when it was named its cathode materials supplier. Early last year, Posco Chemical was named Ultium Cells' supplier of anode materials, another key component of an EV battery.

Posco Chemical has invested 600 billion won ($490 million) in its Gwangyang cathode materials factory to ramp up output from 40,000 tons to 60,000 tons per year. In August, the company announced an investment of 281 billion won to build a cathode materials plant in China with an annual manufacturing capacity of 30,000 tons with local partner Huayou Cobalt.

It aims to increase its annual production capacity for cathode materials from 105,000 tons per year in 2022 to 280,000 tons per year in 2025 and 420,000 tons in 2030.

“Posco Chemical is set to expand its battery materials supplying capability across North America through establishing a cathode materials plant in Canada,” Posco Chemical CEO Min Kyung-zoon said. “We will lead the successful transition to the EV era by further strengthening our strategic partnership with GM and having a stable production capacity with world-class technological competitiveness.”

BY SARAH CHEA [chea.sarah@joongang.co.kr]