Posco Future M signs $22.5 billion battery materials deal with LG Energy Solution
Published: 26 Apr. 2023, 11:09
Updated: 26 Apr. 2023, 18:54
Posco Future M inked a 30-trillion-won ($22.5 billion) deal with LG Energy Solution for high-nickel cathodes, the key material in making electric vehicle batteries.
The Korean battery materials company said Wednesday it will provide LG Energy Solution with nickel, cobalt and aluminum (NCA) cathodes, as well as nickel, cobalt, manganese and aluminum (NCMA) cathodes for seven years starting later this year.
It means Posco Future M will offer around 4.3 trillion won of cathodes every year, the biggest deal in the company's history in monthly supply.
Cathodes are one of four core materials in lithium-ion batteries, which power EVs. Made of lithium, nickel, cobalt and manganese, cathode materials account for 40 percent of the production cost of an electric vehicle battery.
NCA and NCMA cathodes both excel in capacity, durability and resistance and even support quick charging.
"The growth of Posco Future M's battery material business was only available due to the close cooperation with LG Energy Solution, which started at the very beginning of our business," Posco Future M President Kim Joon-hyeong said.
Posco Future M's accumulated deal with LG Energy exceeds 52 trillion won so far, around 60 percent of its total cathode order.
The two signed a 1.9-trillion-won cathode deal in 2020, with Posco garnering around 22 trillion won worth of two orders with Ultium Cells, a 50-50 joint battery venture between LG Energy Solution and General Motors, in 2022.
Posco Future M aims to boost its cathode capacity to 340,000 tons in 2025 and 610,000 tons in 2030. 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.
Posco Chemical recently renamed itself to Posco Future M to better capture its focus on the battery material business.
Posco Future M shares closed 332,500 won Wednesday, down 4.32 percent from the previous trading day.
BY SARAH CHEA [chea.sarah@joongang.co.kr]
with the Korea JoongAng Daily
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