LG Chem confirms cathode precursor joint venture plan

LG Chem vice chairman Shin Hak-cheol confirmed on Wednesday that the company was preparing to form a joint venture to procure a metal used as a precursor for cathode with a mining firm.

Shin said at a press conference in Seoul that the company plans to collaborate with the mining firm, which as technologies in mining, refining and smelting, in various ways to increase its metal sourcing competence.

TheElec was the first to report on Tuesday that LG Chem was planning to form a joint venture with Korea Zinc to procure cathode precursors.

Shin didn’t name Korea Zinc as its partner at the conference but a LG Chem spokesperson confirmed that it was Korea Zinc.

Cathode accounts for 40% of battery costs, making the procurement of raw materials such as precursors needed to produce them important. Precursors are used when mixing cobalt sulfate and lithium hydroxide.

LG Chem will be able to save cost in its cathode production from the new joint venture. 

The South Korean chemical firm is also considering building a cathode factory in Europe or the US, and the joint venture will also likely help with this effort. Building facilities there will allow LG Chem to service its battery making customers better.

Besides cathode, LG Chem is also looking to expand its production of separators, conductors and binders. It plans to spend 6 trillion won up to 2025 for these projects.

The company is planning to start construction of a 60,000 metric tonnes per year cathode factory at Gumi in December. The firm is aiming to expand its cathode production rate from 40,000 metric tonnes per year as of 2020 to 260,000 metric tonnes per year by 2026.

LG Chem is also considering M&A to expand its separator business. 

According to the South Korean chemical firm, the global battery material market will be worth 39 trillion won this year. It will expand 100 trillion won in 2026, the company claimed.