LG Chem is planning to start the operation of one of its key subsidiaries for battery materials one month earlier than planned, TheElec has learned.
The precursor factory being built by Korea Precursor Corporation (KPC), the joint venture between LG Chem and Korea Zinc’s subsidiary Kemco, is expected to be completed in March instead of April as previously planned, sources said.
This was in response to the US’s Inflation Reduction Act and listing of “foreign entities of concern,” which means customers based in the US need to procure more aggressively battery materials they need from non-Chinese companies.
Some of KPC’s customers in the US are thought to be General Motors and Panasonic.
KPC’s precursor factory at Ulsan will start test production no later than in April and use scraps and leftovers from LG Energy Solution and Korea Zinc’s battery production processes as raw materials.
Precursors in battery production are a mix of nickel, cobalt, and other metals that are used to make the cathode of batteries.
KPC will likely seek to get customer approval from its customers for the precursors, a process that takes approximately a year.
The US is expected to enforce its foreign entities of concern list within the year, which will limit business deals of the named companies.
Sources said this could cause a surge of orders for precursors, despite the slowdown in demand for electric vehicles and batteries.
