Posco Chemical, a materials maker under Korean steel major Posco, will build a joint-venture factory in North America with U.S. automaker General Motors for production of cathode active material (CAM) that would make up around 40 percent of the cost of LG Energy Solution’s battery cells going into GM’s Ultium-powered all-electric vehicles, the two companies said Thursday.

With a plan to activate the factory in 2024, details on location and capital expenditure will be disclosed later, Posco Chemical said.

The Posco company said it would be the first battery materials supplier to enter a joint venture with a finished carmaker and become responsible for the supplies of key battery material in North America.

Upon named as the supplier of Ultiuim battery cell in December 2020, Posco Chemical has been building a cathode material factory in Gwangyang in southern Korea with a capacity of 60,000 tons. The new North American facility will expand partnership with GM.

GM in joint venture with Korea’s top battery maker LG Energy Solution launched construction of Ultium Cells facilities in Ohio and Tennessee each with annual capacity of 35GWh. The two will build additional facilities by mid-decade.

Backed by Korean suppliers, GM hopes to launch 30 new EV models globally by 2025, two-thirds in North America so that by the end of 2025, about 40 percent of GM’s vehicles available in the U.S. would be in all-electric.

Posco Chemical has been accelerating expansion in battery materials market around the world after securing value chain. It purchased a 13 percent stake in Qingdao Zhongshou New Energy Technology which provides spherical graphite used as an intermediate material for anodes in September. It acquired a 15 percent stake in Black Rock Mining, an Australian mining company that owns Mahenge Graphite Mine in Tanzania.

It announced factory project with 30,000-ton capacity in China in August and will establish a manufacturing base in Europe after the U.S. venture, the company said.

Posco Chemical is the only maker in Korea that can produce both anodes and cathodes.

It aims to expand cathode material capacity to 105,000 tons in 2022, 280,000 tons in 2025, and 420,000 tons by 2030. For anodes, it aims to boost capacity from 84,000 tons in 2022 to 150,000 tons in 2025, and 260,000 tons in 2030.

Shares of Posco Chemical ended Thursday 5.4 percent lower at 149,000 won ($127).

By Hye-seung Seo

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