EcoPro to invest $1.6B in Pohang cathode battery complex

Industry

Published: 13 Jul. 2023, 12:09 Updated: 13 Jul. 2023, 16:36

EcoPro to invest $1.6B in Pohang cathode battery complex

North Gyeongsang Gov. Lee Cheol-woo, second from left, and EcoPro CEO Song Ho-jun, center, take a photo after signing an agreement to build a cathode plant in Pohang, North Gyeongsang on Thursday. [ECOPRO]

EcoPro will invest 2 trillion won ($1.6 billion) in building a cathode battery materials complex in Pohang, North Gyeongsang, upping its bet on the surging demand for electric vehicles.

The company on Thursday signed a memorandum of understanding with the North Gyeongsang provincial office and the Pohang city government for the project, which the company is tentatively calling Blue Valley Campus, promising a total of 2 trillion won over the course of five years.

The complex, which will be built on a 694,000-square-meter (171.5-acre) site in Pohang, will have a comprehensive value chain from cathodes, precursors and battery recycling. Precursors are raw materials used to make cathodes, the key ingredient that in turn accounts for 40 percent of battery costs.

EcoPro subsidies will participate in the value chain, or Closed Loop ECO-System, with EcoPro Materials producing precursors. EcoPro Innovation will refine lithium hydroxide, while EcoPro BM and EcoPro EM will produce the final cathode products.

EcoPro CnG will recycle used batteries to extract raw materials that can be reused in making cathodes.

EcoPro founder Lee Dong-chae speaks during the groundbreaking ceremony of the company's cathode plant in Hungary in April. [ECOPRO]

Construction of the facility will begin in the fourth quarter, with operations slated to begin in the second half of 2025.

The investment will also create around 1,100 new jobs, EcoPro said.

With the latest investment, EcoPro aims to expand its cathode production capacity, currently at 180,000 tons, to 710,000 tons by 2028.

EcoPro has already invested 2.9 trillion won to build a similar complex in Pohang. The plant hired 1,900 new employees, with another 600 staff to follow later.

"Competition is heating up globally as the country has named the secondary battery as one of their strategic assets," EcoPro CEO Song Ho-jun said. "With the latest investment, EcoPro will solidify our top-tier position in the global cathode market."

The latest investment comes as part of efforts to counter the Biden administration's Inflation Reduction Act, which offers up to $7,500 tax credit to EV buyers whose vehicles were assembled in North America and made with minerals mined and processed in the U.S. or countries that have free trade agreements with Washington.

EcoPro shares closed at 956,000 won on Thursday, up 4 percent from the previous trading day.

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