LG Chem to ramp up cathode production with Tianjin B&M

LG Chem will establish a joint venture with Tianjin B&M Science and Technology to ramp up the production of cathodes, the key raw material for electric vehicle (EV) batteries.

LG Chem Vice Chairman Shin Hak-cheol, left, and Chen Xuehua, founder and chairman of Zhejiang Huayou Cobalt, take a photo after signing an agreement to establish a joint venture for cathode production Monday at LG Twin Tower in Yeouido, western Seoul. [LG CHEM]

LG Chem will establish a joint venture with Tianjin B&M Science and Technology to ramp up the production of cathodes, the key raw material for electric vehicle (EV) batteries.

B&M will invest 128.5 billion won ($104 million) in LG BCM, LG Chem's battery company in Gumi, North Gyeongsang, taking a 49 percent share.

Tongxiang City, Zhejiang-based Huayou Cobalt owns 37 percent of B&M. Huayou Holding owns 25 percent of B&M, while a number of investment firms under Huayou own 21 percent.

LG Chem and B&M promised to together spend a total of 500 billion won through 2025 on LG BCM’s cathode factory in Gumi, which is currently under construction.

The plant will have a capacity of 60,000 tons every year. That is enough to make batteries for 500,000 EVs, LG Chem said. It will also be the world’s largest single factory for cathode production.

The facility is being built on a 6,6116 square-meter plot in Gumi and will start partial operation in the second half of 2024.

Cathodes are one of four core materials in lithium-ion batteries, which power EVs. Made of lithium, nickel, cobalt and manganese, cathode materials account for 40 percent of the production cost of an EV battery.

The joint venture will be headed by Kim Woo-sung, the current president at LG BCM.

“With the establishment of the joint venture, LG Chem will be able to secure a strong manufacturing line from raw materials to cathodes,” said LG Chem Vice Chairman Shin Hak-cheol. “By expanding the supply of best-quality battery materials with price competitiveness, LG Chem will endeavor to become a leading battery material company.”

LG BCM — which stands for battery core material — was launched late last year with the cooperation of the government aiming to create more jobs. LG BCM said it will hire 187 employees for the new factory and the jobs will be reserved for residents of Gumi.

LG Chem CEO Shin and Chen Xuehua, founder and chairman of Zhejiang Huayou Cobalt, signed the agreement on May 30 at LG Twin Tower in Yeouido, western Seoul.

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