Posco Future M bets even bigger on high-density batteries

Posco Future M's cathode production plant in Pohang, North Gyeongsang. [POSCO FUTURE M]

Posco Future M will spend 615 billion won ($460 million) by the end of 2025 to build a high-nickel cathode plant in Pohang, doubling down on the high-density battery sector.

Its board of directors approved the investment plan Monday.

The facility in North Gyeongsang will produce 46,000 tons of high-nickel nickel-cobalt-manganese-aluminum (NCMA) cathodes annually, which is enough to supply batteries for 460,000 electric vehicles.

A high-nickel NCMA battery excels in capacity, durability and resistance and even supports quick charging. Nickel accounts for 80 percent of NCMA batteries, while cobalt takes up less than five percent.

Ground will be broken in the second half, with a goal of finishing the construction by 2025.

The latest investment will boost Posco Future M's cathode production to 271,000 tons by 2025. Pohang will be home to a total of 106,000 tons of cathode production.

The company currently has a 90,000-ton facility in Gwangyang, South Jeolla, a 10,000-ton facility in Gumi, North Gyeongsang and a 5,000-ton facility in China.

It is also building a 30,000-ton cathode plant in Quebec, Canada, with General Motors, and another 30,000-ton plant in Zhejiang, China, in a joint venture with Zhejiang Huayou Cobalt.

Since starting its cathode business in 2012, Posco Future M currently has five cathode products lined up.

It is in the process of developing a lithium iron phosphate, or LFP, battery, to diversify its portfolio. LFP batteries, largely controlled by Chinese manufacturers, have less energy density but cost less and have lower fire risks.

Posco Chemical recently changed its name to Posco Future M to better capture its focus on the battery material business. Posco Future M aims to expand its capacity by 345,000 tons by the end of 2025.

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