POSCO Future M starts building Gwangyang battery materials plant to supply Samsung SDI

POSCO Future M CEO Kim Jun-hyung, fifth from left, and Samsung SDI Executive Vice President Kim Ik-hyeon, sixth from left, break ground during a ceremony for the POSCO Group affiliate's NCA cathode materials plant in Gwangyang, South Jeolla Province, Thursday. Courtesy of POSCO Future M

GWANGYANG, South Jeolla Province — POSCO Future M started building a high-nickel NCA (nickel, cobalt and aluminum) cathode materials plant in the southern port city of Gwangyang, South Jeolla Province, Thursday, aiming to supply all of the electric vehicle (EV) battery materials produced at the factory to Samsung SDI.

The new plant’s annual production capacity will reach 52,500 tons, enough to produce batteries for 580,000 EVs.

A groundbreaking ceremony took place for the factory, for which the chemical unit of POSCO Group decided last July to invest 683.4 billion won ($513 million) to build.

In April, POSCO Future M started building another NCA cathode materials plant in POSCO’s hometown of Pohang, North Gyeongsang Province. The Pohang plant will also supply its entire output to the battery manufacturing unit of Samsung in accordance with a 40 trillion won supply deal signed in January last year.

Once the Pohang plant’s construction is finished later this year and the Gwangyang factory’s construction is completed during the first half of 2025, POSCO Future M will be able to produce 82,500 tons of NCA cathode materials every year.

The company explained that demand for high-nickel NCA cathode materials has been growing as their energy density is high enough to produce batteries for high-performance EVs. In particular, POSCO Future M’s new plants will focus on producing single-crystal cathode materials, which can improve a battery’s thermostability and durability.

Last March, POSCO Future M became the first Korean company to start mass production of NCMA (nickel, cobalt, manganese and aluminum) single-crystal cathode materials.

“We will continue our planned investments here and overseas, regardless of uncertainties surrounding the rechargeable battery market,” said Kim Jun-hyung, outgoing POSCO Future M CEO, who will be transferred to POSCO Holdings to direct the group’s materials business strategies.

Incoming CEO Yoo Byung-ok, who was nominated on Wednesday, did not attend the groundbreaking ceremony.

Addressing concerns about the potential loss of momentum in POSCO Group's battery business following the appointment of former POSCO President Chang In-hwa as the next chairman in March, Kim said Chang is expected to continue fostering the battery and hydrogen businesses to ensure the group's continued growth. Despite the chairman nominee's emphasis on revitalizing the steelmaking business, there is confidence that he will continue to support the battery and hydrogen businesses.

“As the newly appointed chairman, it will be natural for him to check whether any unnecessary facility investments have been made,” Kim said.

He reiterated that POSCO Group will adjust its stakes in joint ventures established with Chinese partners, once the U.S. government provides further details about foreign entities of concern (FEOC) under its Inflation Reduction Act. Washington’s guidelines stipulate that a company would not be eligible for tax credits from 2025 if an FEOC holds 25 percent or more of its board seats, voting rights or equity interest.

“We made verbal agreements with our Chinese partners on the adjustment of stakes in our joint ventures in case of any changes,” Kim said.