LG Chem, Huayou to build LFP cathode plant in Morocco
Published: 24 Sep. 2023, 16:12
- SARAH CHEA
- chea.sarah@joongang.co.kr
LG Chem and Huayou Group will together build a lithium-phosphate-iron (LFP) cathode materials plant in Morocco in the latest efforts to target the high-demand, low-price EV market.
The Korean company said on Sunday it signed a memorandum of understanding with Huayou Group to build a total of four battery materials factories including a plant to make LFP cathode materials in Morocco, which will have a 50,000-ton of production capacity per year.
That is enough to make cathodes needed for 500,000 entry-class EVs, which can normally run about 350 kilometers (217.5 miles) per single charge. Cathodes are one of the four major ingredients in making EV batteries.
Morocco has approximately 50 billion tons of phosphate rock reserves, making it the No. 1 country in the world with 73 percent of the world's total.
The exact size of the investment has not been declared.
It is the first time LG Chem, known for manufacturing the more expensive nickel-cobalt-manganese (NCM) cathodes, is entering the LFP cathode business to meet the growing demand for cheaper LFP batteries as the auto industry steps up efforts to produce more affordable EVs.
LFP batteries have low energy density but have price competitiveness compared to NCM batteries.
“We will actively respond to the emerging LFP cathode materials market with the Morocco plant as our global base,” said LG Chem CEO Shin Hak-cheol. “Our goal is to create a strong, vertically integrated materials supply chain — flowing from raw materials to precursors and cathode materials — and solidify our status as the world's top comprehensive battery materials producer.”
LG Chem said LFP cathodes produced at the Morocco plant will be supplied to the North American market and receive subsidies from the U.S. Inflation Reduction Act (IRA) as Morocco is a free-trade partner with the United States.
The IRA is designed to wean the United States off the Chinese supply chain for EVs. It requires at least 40 percent of the value of critical minerals used in an auto battery to be sourced from the United States, or a free trade partner, to qualify for the $3,750 tax credit per vehicle. Korea has a free trade agreement with the United States.
LG Chem announced an additional investment plan with Huayou Cobalt to build a lithium refining plant in Morocco, aiming to start mass production by 2025 with an annual capacity of 52,000 tons of lithium.
LG Chem also plans to build two other facilities in Indonesia — a precursor plant with an annual production capacity of 50,000 tons and a plant to extract mixed hydroxide from nickel ore for precursor production.
BY SARAH CHEA [chea.sarah@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)