FTC approves LS-L&F joint venture for EV battery materials

LS Group Chairman Koo Ja-eun announces an investment plan for a precursor factory in Gunsan, North Jeolla, on Aug. 2. [YONHAP]

The country’s antitrust regulator approved the establishment of a battery materials joint venture between LS and L&F on Tuesday, paving the way to build a local supply chain for electric vehicle batteries.

The Fair Trade Commission said that the formation would not hurt competition because the two companies have small market shares.

With the approval, the two parties are allowed to proceed with a 1 trillion won ($748 million) project 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 proposed joint venture should also obtain the green light from China, Poland and Vietnam for operations in those countries.

The firm filed an application on June 30 with Korea’s Fair Trade Commission, with the final nod coming through after revising the application three times upon the regulator’s request.

In the application, LS and L&F explained that the precursor factory could help create a supply chain for producing cathodes on Korean soil with LS affiliates supplying nickel sulfate and cobalt sulfate, the joint venture providing precursors and L&F offering cathodes.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]