22 trillion KRW if existing orders are included
Strengthening cooperation with joint venture 'Ultium CAM'
Supplying system with 90,000 tons capacity in Gwangyang·Canada
Extending manufacturing faci
POSCO CHEMICAL will supply cathode materials that is worth 13.76 trillion KRW to General Motors (GM) in the United States. They also sealed a large-scale supply contract after the establishment of a cathode material joint venture with GM.
POSCO CHEMICALannounced on the 28ththat they signed an agreement with GM to supply cathode materials. The cathode material is a key material that accounts for more than 40% of the battery cost. They are made from as raw materials such as lithium and nickel. According to this contract,POSCO CHEMICALwill supply high-nickel cathode materials produced at the Gwangyang plant in Jeollanam-do for three years from next year to 2025 to 'Ultium Cells', a battery joint venture of GMand LG Energy Solution. The total amount of cathode materials that POSCO CHEMICALhas won orders from GM has exceeded 21.8 trillion KRW.
POSCO CHEMICALis planning to operate a supply system with a total capacity of 90,000 tons, including 60,000 tons per year from the Gwangyang plant and 30,000 tons from the plant in Canada. In the future, they are planning to expand production lines for the North American joint venture to respond to GM's expansion of the electric vehicle business.
POSCO CHEMICALand GM established a joint venture 'Ultium CAM' with an annual capacity of 30,000 tons in Quebec, Canada in May. It was the first time in the industry to see the establishment of a joint venture between a materials maker and a finished car manufacturer. The cathode materials produced at this plant will be supplied to Ultium Cells for 8 years from 2025. Based on the raw material price last year, the contract is worth 8.0389 trillionKRW.
POSCO CHEMICALsaid, “We will expand cooperation with the North American joint ventureto build a global supply chain for core materials for electric vehicles, such as establishing a precursor plant, which is an intermediate raw material. With the expansion of the cathode material plant, we will secure additional supply contracts for cathode and anode materials.”
POSCO CHEMICALheld a board meeting on the 27thand confirmed the investment of 326.2 billion KRW and plans to expand production facilities ofprecursorsfor cathode material with an annual capacity of 45,000 tons in Gwangyang plant. Their goal is to start the construction within this year and be completed by 2024. Precursors are intermediate raw materials that account for more than 60% of the cost of cathode materials. It takes important role in cathode material performance, profitability, and supply stability while processing minerals such as nickel, cobalt, manganese, and aluminum.
POSCO CHEMICALplans to expand their precursor production capacity from 15,000 tons this year to 220,000 tons by 2025, which is raising the in-house production rate from 33% to more than 64%.
A company official said, "This investment is to expand in-house production of precursors, which are highly dependent on China. It is also to maximize the competitiveness of raw materials by utilizing POSCO Group's value chain such as nickel and recycling."
By Staff Reporter Tae-jun Park (gaius@etnews.com)