LG Energy Solution Forms JV with China Huayou Cobalt for Battery Recycling Collaboration...

Kwon Young-soo, Vice Chairman and Chief Executive Officer (CEO) of LG Energy Solution. Photo by LG Energy Solution

[Asia Economy Reporter Jeong Dong-hoon] LG Energy Solution is strengthening its collaboration in the battery recycling market with Huayou Cobalt, China’s top cobalt refining (extracting and purifying metals from raw materials) company.

On the 26th, LG Energy Solution announced that it will establish a battery recycling joint venture (JV) with Huayou Cobalt to extract key raw materials from used batteries as part of building a sustainable 'resource circular economy system.'

This is the first Korea-China joint battery recycling company in China. The two companies plan to finalize the establishment of the joint venture by the end of this year after discussing detailed operational plans.

The joint venture will extract recycled nickel, cobalt, and lithium?main raw materials used in cathode active materials?from scrap waste generated during battery production and collected used batteries. The extracted metals will go through the cathode material production process and ultimately be supplied to LG Energy Solution’s battery production plant in Nanjing.

The pre-processing plant, which handles scrap and processes used batteries, will be located in Nanjing, Jiangsu Province, where LG Energy Solution’s production plant is situated. The post-processing plant, which processes recycled metals, will be established in Quzhou, Zhejiang Province, utilizing Huayou Cobalt’s infrastructure.

Kwon Young-soo, Vice Chairman and CEO of LG Energy Solution, said, "Establishing a resource circular economy system that manages the entire battery lifecycle is essential for a sustainable and stable battery supply chain. This collaboration strengthens LG Energy Solution’s raw material supply stability and cost competitiveness through securing battery recycling capabilities, and it holds great significance from an ESG (Environmental, Social, and Governance) management perspective."

Chen Xuehua, Chairman of Huayou Cobalt, stated, "This MOU will solidify the partnership between Huayou Cobalt, which has technological and resource competitiveness in the used battery reuse and recycling market, and LG Energy Solution, which holds the most advanced competitiveness in the global battery market. Both companies will work together to establish a virtuous cycle system for eco-friendly, high-quality battery production."

Huayou Cobalt is China’s largest cobalt producer. It established a precursor joint venture in Quzhou, China, and a cathode material joint venture in Wuxi in 2019 with LG Chem, and a cathode material joint venture in Gumi, Korea, in 2022.

LG Energy Solution is striving to build a stable raw material supply chain. In December last year, together with LG Chem, it invested 60 billion KRW to acquire a 2.6% stake in Li-Cycle, North America’s largest battery recycling company, and plans to receive 20,000 tons of nickel annually for 10 years starting in 2023. Additionally, it signed long-term lithium supply contracts with SQM, one of the world’s largest lithium producers in Chile, and Germany’s Vulcan Energy through 2029.

Meanwhile, LG Energy Solution became the first domestic battery company to join the Responsible Minerals Initiative (RMI) in 2019.