LG Chem to form battery material joint ventures with Chinese firm
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LG Chem CEO Park Jin-soo
By Baek Byung-yeul
LG Chem said Wednesday it had agreed to form two joint ventures with Chinese firm Huayou Cobalt Co. in a bid to ensure a stable supply of cobalt for lithium-ion batteries.
The country's leading battery maker said it will invest 239.4 billion won by 2020 in the joint ventures that will manufacture precursors and cathodes
Cobalt is a key component in the manufacturing of batteries for electric vehicles (EVs), but increasing demand for EVs has resulted in a rise in prices.
According to Metal Bulletin, which specializes in providing benchmark metal prices, the price for cobalt jumped to $95.6 per kilogram at the end of March, compared with $32.7 per kilogram at the end of 2016.
LG Chem said the joint ventures are expected to start producing 40,000 tons of precursors and cathodes, respectively, enough for batteries for up to 400,000 EVs.
Precursor materials are manufactured using cobalt, nickel and manganese and the cathode is the final product after the precursors are combined with lithium. The company added it can increase the annual production of the materials to 100,000 tons to cope with increased demand.
The joint venture factory producing precursor materials will be established in Quzhou, Zhejiang Province while the factory producing cathodes will be in Wuxi, Jiangsu Province. Huayou Cobalt Co. is one of the largest suppliers of cobalt in China.
With the joint ventures, LG Chem expects it can strengthen cost competiveness in the electronic vehicles battery market. The company operates battery plants in Korea, China, the United States and Poland. It currently provides batteries to General Motors, Volvo, Renault, Hyundai Motor and Kia Motors.