Korea’s POSCO Future M, SK on announce domestic investment plans

Rendering of POSCO Future M Co.‘s new cathode material plant, in Pohang, North Gyeongsang Province. [Photo provided by POSCO Future M]

South Korean battery manufacturers are expanding domestic investment to expand production facilities for cathode materials and enhance research and development and quality in an effort to meet growing global demand.

POSCO Future M Co., a manufacturer of cathode and anode materials, announced Monday that its board approved the plan to invest 614.8 billion won ($460.5 million) by 2025 to build a cathode material plant with a capacity of 46,000 tons in Pohang in North Gyeongsang Province. The plant will produce high-nickel cathodes from nickel, cobalt, manganese, and aluminum (NCMA).

A high-nickel cathode is a cathode material with a high percentage of nickel of more than 80 percent. It helps the battery last longer with higher capacity and output. It is widely used for high-performance electric vehicles. Demand for high-nickel cathodes has been growing globally.

The facility expansion is expected to boost the cathode material production capacity of POSCO Future M to 106,000 tons in Pohang alone. Its global cathode production capacity is expected to reach 271,000 tons by 2025, including 30,000 tons from Ultium CAM, a joint venture with U.S. automaker General Motors Co., in Quebec, Canada, and another 30,000 tons from its joint venture with Huayou Cobalt Co. in Zhejiang, China.

“We are considering other investments in addition to the one for this cathode material plant,” said an unnamed official from POSCO Future M. “Our annual production capacity will be increased to 345,000 tons by 2025.”

Another Korean battery maker SK on Co. also announced a plan on Monday to invest 470 billion won by 2025 in its battery research institute in Daejeon Metropolitan City to expand research facilities and newly establish a pilot plant for next-generation batteries and a global quality control center known as Global Validation Center (G-VC).

SK on Co. logo [Courtesy of SK on]

SK on plans to expand research facilities within the existing site of the research institute and significantly expand research facilities for future technologies such as prismatic and lithium iron phosphate (LFP) batteries by next year.

SK on will complete the next-generation battery pilot plant by the first half of next year and launch material development for all-solid-state batteries.

“Our goal is to develop a prototype of an all-solid-state battery in the second half of 2024 and commercialize it in 2028,” said an unnamed official from SK on.

The company will set up a global quality control center in Korea following those in North America and Europe to enhance quality improvement capabilities. Products will be assessed and areas for improvement will be identified at the quality center for timely application to the production process to ultimately raise yield, the percentage of non-defective items of all manufactured items.

The decisions to increase domestic investment by POSCO Future M and SK on come on the need for a strong local production base before targeting the North American market, according to sources.

Korean battery and battery materials makers have been aggressive lately in their investments in North America to benefit from the tax credits under the U.S. Inflation Reduction Act (IRA).

“We are making aggressive investments to receive subsidies in the U.S., but local capabilities are also important,” said an unnamed official from the battery industry. “We plan to reinforce R&D and quality control capabilities and use the know-how in North America.”