LG Chem (KOR:051915) last week confirmed the creation of a joint venture partnership to produce precursor materials from recycled metals for electric vehicle batteries. The Korea-based company is a leading global chemical player with a diversified business portfolio in the key areas of petrochemicals, advanced materials, and life sciences.
LG Chem manufactures a wide range of products from high-value added petrochemicals to renewable plastics, specialising in cutting-edge electronic and battery materials, as well as drugs and vaccines to deliver differentiated solutions for its customers.
The agreement between LG Chem and Korea Energy Materials Co. (KEMCO), a subsidiary of Korea Zinc, a world leader in non-ferrous metal smelting, was signed last week and attended by key stakeholders including LG Chem CEO Hak-cheol Shin, Korea Zinc vice chairman Yun. B Choi and KEMCO CEO James Soung Choi, among others.
KEMCO will take majority ownership in the JV with 51 percent with LG Chem holding the remaining 49 percent. Dedicated production lines in Onsan Industrial Complex, north of Busan, will manufacture NCMA (nickel, cobalt, manganese, aluminum) precursor materials for next-generation electric vehicle batteries, key to LG Chem’s supply chain strategy for EVs.
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The joint venture plans to invest more than KRW 200 billion (approx. USD 162 million) in the provisionally named Korea Precursor Company to produce 20,000 tons of precursor metals per year, generating sales of KRW 400 billion (approx. USD 323 million) by 2025. The joint venture is scheduled to start construction in July this year, and start full production in the second half of 2024. The precursor materials will be supplied directly to LG Chem’s cathode plant in Cheongju, South Korea.
Precursor materials will be produced from metals supplied by KEMCO as well as from recycled metals extracted from scraps and depleted batteries. The chemical recycling process employed in the plant will maximise the metal recovery rate through a combination of both dry and wet processes while incorporating eco-friendly processes such as wastewater recycling to minimize harmful emissions.
“This investment is another crucial step toward LG Chem cementing its position as a world leader in EV battery manufacturing,” said Hak-cheol Shin, CEO of LG Chem. “Our aggressive partnership strategy is a key component to growing our eco-friendly battery material business.”