LG Chem breaks ground $1.5 bn on U.S. cathode plant

Groundbreaking of LG Chem Tennessee cathode plant [Courtesy of LG Chem]

LG Chem Ltd. recently broke ground on a cathode plant in Tennessee, the United States, which it aims to make the largest cathode plant in the country.

Clarksville, located 49 miles north of Nashville in Tennessee, has become an attractive destination for multinational corporations due to its affordable land and favorable tax incentives. The region’s vast soybean fields are transforming into a hub for advanced industries, particularly in the production of electric vehicle (EV) batteries.

During the groundbreaking ceremony, LG Chem unveiled plans for an advanced anode material plant spanning 1.7 million square meters on its site in Clarkesville by investing an estimated 2 trillion won ($1.5 million) in the plant’s first phase. The facility is set to begin full-scale production of 60,000 tons of NCMA (nickel, cobalt, manganese, aluminum) anodes annually by 2026. This output is sufficient to power 600,000 high-performance pure EVs each year, making it the largest facility in North America.

The LG Chem cathode plant in Tennessee will be dedicated to serving North American customers. The Korean manufacturer solidified its commitment to the region by signing a comprehensive agreement with General Motors Co. (GM) for the long-term supply of 950,000 tons of cathode materials. Ultium Cells LLC, a joint venture battery company formed by LG Chem subsidiary LG Energy Solution, Ltd. and GM, is also constructing a second plant in Spring Hill, Tennessee.

LG Chem also has a contract with Toyota Motor Corp for cathode material supply in North America. The deal, worth 2.9 trillion won, was a significant achievement as it met the stringent quality standards laid out by the Japanese company.

Despite a recent slowdown in the EV market, LG Chem remains steadfast in its commitment to the industry. Speaking at a local press conference, vice chairman Shin Hak-cheol emphasized that this market fluctuation “will likely have a minimal impact on our overall EV blueprint.” The company aims to position itself as a comprehensive battery material company in North America, with plans to expand the cathode plant via a second phase of investment to meet rising demand.

The Tennessee cathode plant sources precursors, a crucial raw material, from the Ulsan plant operated by Korea Precursor Co. (KPC), a joint venture between LG Chem and Korea Zinc Company, Ltd. By obtaining mineral precursors from countries that have signed free trade agreements with the United States, the plant stands to benefit from subsidies under the U.S. Inflation Reduction Act (IRA).