LG Chem and Kemco create battery precursor joint venture

Industry

Published: 02 Jun. 2022, 15:02

LG Chem and Kemco create battery precursor joint venture

LG Chem Vice Chairman Shin Hak-cheol, right, and Kemco CEO James Soung Choi shake hands after signing an agreement to establish a joint venture on May 31 at Korea Zinc’s headquarters in southern Seoul. [LG CHEM]

LG Chem will establish a joint venture with Kemco to build a plant for battery precursors, a critical material in the making of electric vehicle (EV) batteries.

The company will invest 51 billion won ($41 million) in the joint venture and own 49 percent. Kemco will invest 53 billion and own the rest.

The joint venture, tentatively named Korea Precursor Company, aims to spend 200 billion won through 2024 to build a precursor factory in Ulsan.

Precursors are raw materials for the making of cathodes and are produced by combining materials such as nickel, cobalt and manganese. They account for 70 percent of the cost of cathodes, LG Chem said.

Established in 2017, Kemco is a nickel sulfate supplier that is 35 percent owned by Korea Zinc. The company’s annual capacity currently stands at 80,000 tons.

Kemco will supply nickel to the joint venture, and the produced precursors will be supplied to LG Chem’s cathode factory in Cheongju, North Chungcheong.

Groundbreaking is scheduled for July, with the goal of starting mass production in the second quarter of 2024.

Annual capacity will stand at 20,000 tons, LG Chem said.

The joint venture will also use scrap and recycle metal from used batteries as raw materials for making precursors.

“Though battery raw materials have been at the center of the world’s attention, Kemco has long been only exporting nickel overseas,” said Kemco CEO James Soung Choi. “We will endeavor to contribute to the localization of precursors.”

LG Chem Vice Chairman Shin Hak-cheol and Kemco CEO Choi signed the agreement on May 31 at Korea Zinc’s headquarters in southern Seoul.

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