Posco Holdings and GS Energy to establish battery recycling venture

Posco Holdings will establish a battery recycling joint venture with GS Energy, the companies said Thursday.

GS Group Chairman Huh Tae-soo, center left, shakes hands with Posco Group Chairman Choi Jeong-woo after signing an agreement to establish a battery recycling joint venture on Thursday at Posco Center in Gangnam District, southern Seoul. [POSCO HOLDINGS]

Posco Holdings will establish a battery recycling joint venture with GS Energy, the companies said Thursday.

They will together invest 170 billion won ($120 million) in the joint venture, with Posco Holdings holding 51 percent and GS Energy the rest.

Posco-GS Eco Materials will operate a battery recycling business, which is to extract raw materials from used batteries to use in the making of batteries.

The battery recycling market has been expanding in recent years as the prices of critical minerals are rising rapidly amid increasing demand.

The size of the global battery recycling market is expected to reach 600 trillion won by 2050, from 1.65 trillion won in 2019, according to data from market tracker SNE Research.

Eco Materials will also run a battery-as-a-service (BaaS) business, which involves battery leasing and swapping and energy storage systems (ESS).

Being able to evaluate the remaining value of used batteries is considered a key step toward succeeding in the market, Posco said.

The venture will be established this year.

"The battery recycling market is expected to grow further as the process of battery recycling will become mandatory starting in Europe in 2030," said Posco Holdings Chairman Choi Jeong-woo. "Through the cooperation, Posco and GS will be able to stably secure used batteries and create synergy effects in building a new ecosystem of the battery recycling industry."

The two companies signed an agreement on the establishment of Posco-GS Eco Materials Thursday at the Posco Center building in Gangnam District, southern Seoul, with Choi, Yoo Byeong-og, vice president at Posco Holdings, GS Group Chairman Huh Tae-soo and GS Energy CEO Huh Yong-soo, in attendance.

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