[Photo by Lee Chung-woo]
LG Chem Ltd., parent of South Korea’s top lithium-ion battery maker LG Energy Solution Ltd., will invest 475.4 billion won ($400 million) to build what would be the world’s largest cathode materials factory in Korea by 2025 for stable supply of battery materials amid heavy competition.
LG Chem on Tuesday held a groundbreaking event on Tuesday for the factory capable of producing 60,000 tons of cathode materials per year, which can be used in batteries to power about 500,000 units of all-electric performance vehicles. It expects to invest 475.4 billion won via its subsidiary LG BCM through September 2024 to build the factory in Gumi, North Gyeongsang Province with an aim to complete the construction by 2025.
LG Chem shares ended 5.31 percent higher at 773,000 won in Seoul on Wednesday.
Cathode material, a core material in rechargeable battery, takes up nearly 40 percent of production costs for a lithium-ion battery. LG Chem plans to supply nickel-cobalt-manganese-aluminum (NCMA) cathode materials from the new factory that is expected to enhance battery stability and output at lower costs.
With the new facility, LG Chem’s cathode materials production capacity at home will more than double from now. The company currently churns out a total of 40,000 tons per year from its Cheongju and Iksan plants in Korea and another 40,000 tons from the Wuxi plant in China. For the new Gumi plant, China’s No. 1 cobalt supplier Zhejiang Huayou Cobalt Co. will continue to supply raw materials as part of cooperation to counter any abrupt future price hike and supply shortage.
[Photo by Lee Chung-woo]
The groundbreaking event was attended by President Moon Jae-in, LG Chem Vice Chairman Shin Hak-cheol, Minister of Economy and Finance and Deputy Prime Minister Hong Nam-ki, Minister of Employment and Labor An Kyung-duk, and Minister of SMEs and Startups Kwon Chil-seung.
“LG Chem will use the best-in-class technologies and facilities for the Gumi plant to make it the world’s No. 1 factory for meeting the fast-growing demand for EV battery materials,” said Shin.
President Moon also celebrated the groundbreaking, saying the new factory will give an opportunity for the Gumi industrial complex and the domestic battery industry to make a leap forward.
“The North Gyeongsang Province will become a battery hub, and Korea will be able to lead the global battery supply chain,” Moon added.
With the new factory, about 8,200 new jobs will likely be created in Gumi, according to the Ministry of Trade, Industry and Energy.
By Lee Chuk-bok, Lim Sung-hyun, Song Gwang-sup and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]