LS, L&F to build $780 million EV battery materials plant

LS Chairman Koo Ja-eun, second from left, inspects a nickel sulfate factory in Asan, South Chungcheong, on March 27. [YONHAP]

LS and L&F will together invest 1 trillion won ($783 million) to build a battery materials plant in Gunsan, North Jeolla.

The joint venture, tentatively named LS-L&F Battery Solution, will build a precursor plant in Saemangeum, a reclaimed area on the country's southwest coast. LS will hold 55 percent of the plant, while L&F will hold 45 percent.

Precursors are raw materials used to make cathodes and are produced by combining materials such as nickel, cobalt and manganese. They account for 70 percent of the cost of cathodes, the material that in turn accounts for 40 percent of battery costs.

The two companies approved the plan at their board meetings Friday. Daegu-based L&F is a cathode producer and is the first company globally to begin mass producing high-nickel cathodes in Jan. 2021. Its clients include Tesla.

The duo will break ground on the plant within the year, and targets starting mass production by 2026. The annual capacity will increase to 120,000 tons by 2029, equivalent to powering about 1.2 million electric vehicles.

LS MnM, a fully owned subsidiary of LS, will supply nickel sulfates to the joint venture for the precursor. The produced precursor will be sent to L&F to make cathodes, LS said.

"We hope this 100-percent domestic partnership, or K-alliance, can contribute to strengthening the competitiveness of Korean-made batteries in global markets and rapidly meet the Inflation Reduction Act and European Union's Critical Raw Material Act," LS said in Friday's statement.

LS Chairman Koo Ja-eun in January announced that the company will invest 20 trillion won for the next eight years in batteries, electric vehicles, and semiconductors to develop the sectors into the next growth engines.

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