LG Chem Invests 500 Billion KRW in Cathode Material Joint Venture with China Huayou Cobalt

Gumi Anode Material Corporation Transition to Joint Venture
Establishing a Stable Supply System for Raw Materials and Components

Shin Hak-cheol, Vice Chairman of LG Chem (left), is taking a commemorative photo with Jin Seol-hwa, Co-President of Huayou Cobalt, after signing a joint venture establishment agreement at the LG Twin Towers in Yeouido, Seoul on the 30th.

[Asia Economy Reporter Oh Hyung-gil] LG Chem is investing 500 billion KRW with China’s Huayou Cobalt to establish a joint venture specializing in cathode materials, a core component of batteries.

On the 30th, LG Chem announced that it signed a joint venture establishment agreement with B&M, a subsidiary of Huayou Cobalt, at the LG Twin Towers in Yeouido, Seoul. The signing ceremony was attended by key officials from both companies, including Shin Hak-cheol, Vice Chairman of LG Chem, Jin Seol-hwa, President of Huayou Cobalt, and Jin Yochung, Vice Chairman.

The joint venture will be established by B&M investing in LG Chem’s subsidiary cathode material company in Gumi, which was launched as a government win-win job creation project at the end of last year. LG Chem and B&M will hold 51% and 49% stakes respectively, and will invest approximately 500 billion KRW by 2025 through initial capital and additional funding.

The joint venture will build a dedicated production line for next-generation electric vehicle batteries using NCMA (Nickel-Cobalt-Manganese-Aluminum) cathode materials. The annual production capacity will be about 60,000 tons or more, with partial mass production expected to begin in the second half of 2024. This capacity is enough to produce batteries for approximately 500,000 high-performance pure electric vehicles (EVs) capable of driving 500 km. The CEO of the joint venture will be Kim Woo-sung, CEO of the Gumi cathode material company.

Through this joint venture, LG Chem will secure a stable supply of essential metals such as nickel and cobalt for cathode material production. B&M aims to secure profits through its equity investment in the joint venture and expand its global cathode material business.

Huayou Cobalt will guarantee a stable supply of key metals to the joint venture and supply precursors necessary for the operation of the Gumi joint venture through its Chinese Quzhou subsidiary established in partnership with LG Chem.

Vice Chairman Shin Hak-cheol said, "We have further strengthened a robust vertical integration system from core raw materials to cathode materials," adding, "We will continue to expand the supply of battery materials with the best quality and cost competitiveness to customers and leap forward as the world’s top comprehensive battery materials company."

President Jin Seol-hwa said, "We have taken an important step forward to globally expand the cathode material business," and added, "By combining LG Chem’s technology and market competitiveness with Huayou’s strong value chain capabilities, we will contribute to the advancement of the global lithium battery industry."