POSCO Chemical to ramp up cathode precursor output by 10 times

Gwangyang plant [Source : POSCO Chemical]

POSCO Chemical Co. is ramping up production of cathode precursor at its Gwangyang plant by 10 times to actively respond to the rising demand for electric vehicle battery materials.

POSCO Chemical on Tuesday held a groundbreaking ceremony for the new cathode precursor factory at its Gwangyang plant complex in South Jolla Province, Korea. The company is investing 326.2 billion won ($255.5 million) to ramp up the annual production output of cathode precursors to 50,000 tons from current 5,000 tons. The new production facility will be completed by 2024.

A cathode precursor is a compound consisted of nickel, cobalt, manganese, and such that are used for making cathode materials in a rechargeable battery. It accounts for 60 percent or more of the cost of making cathode materials, thus considered a key profitability factor for a battery business.

POSCO Chemical is currently capable of producing 15,000 tons of cathode precursors. It plans to ramp up its output capacity to 220,000 tons by 2025 and 440,000 tons by 2030. It is seeking to secure 73 percent of its precursor needs in house by 2030, up from current 14 percent.

Korean battery makers import 79 percent of their precursor needs, with those from China making up for more than 90 percent of the total, according to the Korea International Trade Association.

POSCO Chemical is planning to build a cathode precursor factory at Ultium CAM, its cathode active materials manufacturing joint venture with General Motors in Quebec, Canada. The company is seeking to lead the cathode precursor market through the robust supply chain under its parent POSCO Group, which is actively grooming the electric battery materials as a new engine for growth beyond its mainstay business. The steel giant made a stake investment in Australian nickel mining and smelting company Ravensthorpe Nickel Operation last year along with other investments in the industry under a plan to produce 220,000 tons of nickel by 2030.