LG Chem Ltd. is working on establishing cathode material plants in the United States and Europe in joint ventures to back its battery unit LG Energy Solution’s expansion to become global No. 1 power behind electric vehicles after it goes public this month, according to a senior executive.
“We are currently studying to build cathode material plants in the U.S. and Europe with a global battery or vehicle manufacturer,” said Nam Chul, head of advanced materials business at LG Chem, in an exclusive interview with Maeil Business Newspaper on Tuesday.
“Materials demand is very high among there (U.S, and Europe) in line with soaring demand in secondary batteries for electric vehicles,” he said.
“Since supply chain has become critical, battery makers and automakers require reliable partnership with materials suppliers,” he added, projecting specific details on joint ventures next year.
The interview was made as LG Energy Solution the company had spun off as pure-play battery maker has completed book-building session for Korea’s largest-ever IPO in the scale of near $11 billion. Pricing will be announced on Friday.
LG Chem’s new overseas plants will be modeled after the Gumi plant that broke ground this week to become the world’s largest cathode materials facility upon competition in 2025, encompassing full process from metal, precursor, and cathode material manufacturing to recycle through waste battery collection. Cathode material production involves pre-process of creating precursor with metal. LG Chem has been eagerly searching for mines and waste battery recycling to secure key mineral metal.
“Recycling would become pivotal in cathode material production amid enhanced environmental commitment,” he said.
Nam, who attended the groundbreaking ceremony of LG Chem’s cathode materials plant in Gumi, North Gyeongsang Province, anticipated the Gumi factory to play an important role in the process of building cathode materials plants in the U.S. and Europe.
LG Chem plans to apply technology and processing of its cathode material factory in Cheongju – or mother factory – to the Gumi plant.
The Gumi factory will apply metal recycles and a successful establishment will allow the company to transfer the process to plants in the U.S. and Europe, Nam said.
The executive also hinted possibility of advancing into silicon anode business through partnership.
LG Chem has been accelerating move to nurture new materials business through secondary battery material sector portfolio realignment early last year. The company recently integrated businesses like battery assembly solution to advanced materials business for capacity maximization. The advanced materials business involves about 10 materials including high value materials like cathodes and separators.
LG Chem, which last year announced to invest 6 trillion won in secondary battery materials, will be upping spending in the sector in the future.
“Secondary battery materials business is just into the childhood stage and investment will inevitably grow in line with the development in the industry,” Nam said.
By Lee Yoon-jae and Lee Eun-joo
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