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POSCO Chemical Invests in a 100,000-ton Precursor Factory in Gwangyang
2022.03.07
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POSCO Chemical signed an investment agreement for its battery precursor project with South Jeolla Province and Gwangyang city at Gwangyang City Hall in South Jeolla Province in March 7, 2022.
- Will raise the local production rate of precursors that account for 60% of the cost for cathode materials and secure competitiveness in raw materials.
- Min Kyung-zoon, CEO of POSCO Chemical said, “We will complete the entire value chain for cathode material business and lead the K-battery industry.”
POSCO Chemical added fresh fuel to its efforts to strengthen its competitiveness in raw battery materials by making a hefty investment in building a new precursor factory capable of producing 100,000 tons of precursors a year.
POSCO Chemical, South Jeolla Province and Gwangyang city held an investment agreement signing ceremony on March 7, 2022 at Gwangyang City Hall, attended by POSCO Chemical CEO Min Kyung-zoon, The governor of South Jeolla Province Kim Young-rok, and Gwangyang city Mayor Jung Hyun-bok.
POSCO Chemical has decided to invest about KRW 600 billion starting this year to build a new precursor factory in phases within the Sepung Industrial Complex in Gwangyang. The factory will be built with surface area of more than 200,000㎡and will produce 100,000 tons of precursors a year, which is enough to make cathode materials that go into over 1,200,000 EVs.
This major investment was made to secure competitiveness in raw materials for the cathode material business and seize the market opportunity early on in the game in response to the growing EV battery market.
Precursors are intermediate raw materials for cathodes, which are an essential material for batteries. They are manufactured by processing minerals such as nickel, cobalt, manganese, and aluminum. They also account for over 60% of the cost for cathode materials, and the need for domestic production is rising along with the increased importance of stability of supply chain for raw materials.
According to the market research institution QYResearch Korea, only 13.9% of all precursors used in Korea are produced inland as of 2020 and the nation relies heavily on imports from China. For the competitiveness of Korean batteries to be improved, more precursors would need to be supplied from Korea.
POSCO Chemical aims to expand its precursor production capacity from 15,000 tons this year to 185,000 tons by 2025 and boost the self-production rate from 33% to 67%. To that end, POSCO Chemical has begun constructing a precursor factory in China with an annual production capacity of 35,000 tons in collaboration with Huayou Cobalt. It is also expanding investment for precursor production in conjunction with other raw material projects, including the POSCO Group’s securing of nickel mining rights and recycling.
Once the precursor factories are complete, POSCO Chemical will have set up a complete value chain for its cathode material business in the Gwangyang bay area, further enhancing the manufacturing efficiency. The city of Gwangyang is home to extensive infrastructure for secondary battery materials for the POSCO Group, including a cathode material factory with an annual production capacity of 90,000 tons, the largest in the world for a single factory slated to be completed this May, POSCO Lithium Solution, which produces raw materials for lithium, and POSCO HY Clean Metal, which provides raw materials by recycling discarded batteries.
POSCO Chemical CEO Min Kyung-zoon said, “We will complete the entire value chain for cathode material business in collaboration with South Jeolla Province and Gwangyang city with their full support for the formation of the battery ecosystem to drive the K-battery business forward.”
