[Featured Stock] Yuil Enertech Achieves World's Highest Lithium Recovery Rate from Spent Batteries... Jaeyeong Tech as the 'Solution' to Reduce Dependence on China

[Asia Economy Reporter Hyungsoo Park] Yuil Enertech is showing strong performance. The stock price appears to be influenced by expectations that the value of Jaeyeongtec's shares, which possesses lithium extraction technology in the used battery market, will increase. With the implementation of the U.S. Inflation Reduction Act (IRA), there is an emergency in the supply of minerals and components used in North American automobile and battery manufacturing starting next year, intensifying competition to secure lithium. As the IRA will be fully enforced in the secondary battery industry from next year, there are calls for urgent measures to diversify raw materials and supply chains.

As of 11:57 AM on the 24th, Yuil Enertech is trading at 17,200 KRW, up 15.05% from the previous day.

Jaeyeongtec is a company that recovers rare metals such as lithium and NCM sulfate from used batteries. It is the only company in the industry that possesses the pre-roasting extraction process technology. Unlike the conventional solvent extraction process, the pre-roasting extraction process can extract lithium before other metals, maintaining a high recovery rate and purity of lithium. ResearchAlum rated Jaeyeongtec’s lithium recovery rate at 85%, the highest level worldwide.

Researcher Donghyun Lee of ResearchAlum explained, "Global electric vehicle sales in 2021 reached 6.6 million units, more than double the 3.16 million units in 2020," adding, "Along with the increase in electric vehicle sales, the demand for lithium used in lithium-ion batteries is also rapidly increasing."

He continued, "The increase in lithium demand, coupled with disruptions in lithium mining and supply instability, has caused prices to rise more than fivefold compared to the same period last year," and added, "The electric vehicle industry is focusing on the industry that recycles used batteries to recover lithium."

According to the Korea International Trade Association, from January to July this year, imports of lithium hydroxide (including lithium oxide and lithium hydroxide), a key material for secondary batteries, amounted to $1.74829 billion (approximately 2.3357 trillion KRW), of which imports from China accounted for $1.47637 billion (approximately 1.9724 trillion KRW), representing 84.4%. The dependence on Chinese imports of lithium hydroxide rose by 18.9 percentage points from 64.9% in 2018 to 83.8% last year.

From January to July this year, imports of lithium hydroxide increased by 454.1% compared to the same period last year. Imports from China surged by 469.2%.

Jaeyeongtec has started supplying lithium carbonate and NCM (nickel-cobalt-manganese) sulfate to the top three domestic cathode material and lithium hydroxide producers. Yuil Enertech expanded its business area into used battery recycling by investing 10 billion KRW in convertible bonds (CB) in Jaeyeongtec as a strategic investor (SI). If the CB is converted into common stock, the shareholding ratio will be about 18%, securing Yuil Enertech’s position as the second-largest shareholder of Jaeyeongtec.

Jaeyeongtec plans to invest 40 billion KRW in its Gumi plant by 2023 to expand the lithium carbonate and NCM sulfate solution extraction plant to three times its current size. Currently, the production capacity of black powder is 1,800 tons per year, and with the new plant scheduled to be completed in 2023, an annual production capacity of 6,600 tons is expected.

Researcher Choongheon Lee of ValueFinder said, "We expect record-high orders this year," explaining, "The decision to expand the plant was made to respond to the steep increase in demand, and the new plant is scheduled to be completed in the fourth quarter of this year." He added, "The capacity will be expanded more than fourfold compared to the existing production capacity, enabling us to respond with an annual scale of about 300 billion KRW."