FAR EAST: SOUTH KOREA REPORT
LG Chem says it will build a cathode material plant for automotive battery materials in Gumi, central South Korea. LG Chem has the second largest automotive battery business in the world. They will continue to invest in increasing production in the materials field to meet the increasing demand and plans to start mass production by 2025 and will build a dedicated line for cathode materials with high nickel content, called NCMA, which can increase the output of batteries.
LG Chem’s new plant will be its fourth; it has two cathode material plants in operation in Korea and one in China. The current production capacity is 80,000 tons. LG Chemical produces its own cathode materials, separation membranes, and adhesives, and supplies them to LG Energy Solution, its battery subsidiary. LG Chem is working with Toray Industries, Inc. to secure the amount of separation membrane to be procured.
LG Energy, which is growing rapidly against the backdrop of the global shift to EVs, is scheduled to be listed on the Korean stock exchange in late January, and LG Chemical, the parent company of LG Energy, is also searching for a new pillar of growth. Judging that demand for battery materials will continue to grow for the time being, the company decided to invest in increased production of key components.
Source: The Nikkei
PSR Analysis: LG has been very active. LG Energy Solutions has agreed to team up with Stellantis in North America to establish a joint venture to produce batteries for EVs. This is the second battery joint venture for LG Energy Solutions in North America. It has already formed a joint venture with GM. As for other Korean companies, SK Innovation announced a joint venture with Ford and Samsung SDI announced a joint venture with Stellantis. All three Korean battery giants have now entered into a joint venture with the North American Big Three and have decided to build a large-scale battery plant.
The establishment of a battery materials plant in Korea, as announced in the article above, is clearly aimed at increasing their international presence in the battery field where demand is expected to grow.
The cathode material, which accounts for about 40% of the battery production cost, is an important material that determines the battery’s capacity, life span, and other important performance characteristics. The cathode material, together with the anode material, separation membrane, and electrolyte, is called the four major battery materials.
The construction of the Gumi plant is a dedicated line for NCMA (nickel-cobalt-manganese-aluminum) cathode materials for next-generation EV batteries, which LG Chem is intensively developing. The NCMA cathode material is a product that integrates LG Chem’s best material technology. It is characterized by an increase in the nickel content, which determines energy density, to the 90% level, and by the use of aluminum, which enhances safety and provides excellent stability and output.
The battery environment for EVs in Korea, led by LG Chem, is growing rapidly, but at the same time, we hear that the shortage of human resources is becoming more serious.
However, in the long run, this problem will be solved. As it is common for growth industries to naturally attract talented engineers. In the past, there have been some problems, such as a large-scale recall due to battery ignition problems, but these problems have been overcome and the presence of Korean battery manufacturers is expected to increase in the future. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
