Posco said on Wednesday that it plans to build a new factory that will produce high purity nickel uses in cathodes for electric vehicle batteries.
The company plans to spend 230 billion won to install steel removal process on its subsidiary SNNC’s existing factory equipment.
Posco will also build a new factory with the funds that will manufacture high purity nickel with a capacity of 20,000 metric tonnes per year, it said.
The amount is enough to power 500,000 units of EVs, the company claimed.
SNNC will manufacture nickel mattes using the additional equipment.
The steel removable process will create nickel mattes with 75% purity, Posco said.
These mattes will be supplied to Posco, which will refine the material into nickel with over 99% purity.
This nickel will then be sold to group affiliate Posco Chemical.
Posco Group has previously said it plans to procure 220,000 metric tonnes of lithium and 100,000 metric tonnes of nickel every year to manufacture 400,000 metric tonnes of cathode and 260,000 metric tonnes of anode every year by 2030.
It is aiming for market share of 20% of the global batter market and sales of 23 trillion won per year from the business.
According to analyst firm WoodMac, the global EV market is expected to grow from 3 million units in 2020 to 32 million units in 2030. Demand for nickel, a key ingredient of battery cathodes, are expected to see high demand corresponding to this growth.