SK On, Ecopro, and China's GEM to Build Precursor Production Plant in Saemangeum

SK On is establishing a battery core material production facility in Saemangeum in collaboration with domestic and international partners.

'GEM Korea New Energy Materials,' a joint venture involving SK On, cathode material company EcoPro, and global precursor company China GEM (Gelinmei), announced on the 24th that it will sign an investment agreement for the construction of a precursor production facility at the Ramada Hotel in Gunsan, Jeonbuk.

The three companies will invest up to 1.21 trillion KRW and aim to complete the precursor factory with an annual production capacity of about 50,000 tons by 2024, starting construction within this year. GEM Korea plans to gradually expand its precursor production capacity and will employ more than 1,000 people to support this.

Precursors are key raw materials that account for 65% to 70% or more of the cost of cathode materials and are compounds made by mixing raw materials such as nickel, cobalt, and manganese. The 50,000 tons of precursors correspond to the amount of cathode material needed to produce batteries for approximately 300,000 electric vehicles (based on 105 kWh per vehicle).

The precursors produced at the Saemangeum plant will use nickel intermediate products (MHP) produced by the joint venture of the three companies in Indonesia as raw materials. The three companies signed an agreement to establish a nickel intermediate product manufacturing corporation in November last year and announced plans to mass-produce MHP equivalent to about 30,000 tons of nickel annually starting from the third quarter of 2024.

They decided to invest considering various operational advantages such as the support policies and subsidies from the Saemangeum Development Authority, logistics infrastructure including inland transportation and shipping related to exports and imports.

Choi Young-chan, Chief of Management Support at SK On, said, "SK On, which has proven advanced technologies such as high-nickel development, will further strengthen its global competitiveness by reinforcing the supply chain of raw materials to support this. We will also do our best to revitalize the local economy and promote mutual growth."

Meanwhile, SK On signed a memorandum of understanding (MOU) to establish GEM Korea New Energy Materials, a three-party joint venture for precursor production, with EcoPro and GEM at the SK Seorin Building in Jongno-gu, Seoul on the same day.