[Report] Full Value Chain of Secondary Battery Materials Operating in Gwangyang... POSCO Accelerates Investment

Production of 90,000 Tons of Cathode Materials Annually at Gwangyang Yulchon Industrial Complex
Resource Circulation System Extending to Lithium Raw Materials and Recycling Business

"Cathode materials are just as sensitive as semiconductors. If even a tiny amount of defect is found in the particles within the product, the entire batch is rejected."

This was explained by Choi Wook, Head of the Cathode Material Department at POSCO Future M's Gwangyang plant, before entering the POSCO Future M factory in the Yulchon Industrial Complex, Gwangyang, Jeonnam, on the 25th. The actual process of entering POSCO Future M's Cathode Material Plant 1 was filled with procedures to remove external contaminants. Entry required not only a safety helmet, mask, goggles, and safety shoes but also separate covers for shoes and head. Additionally, only after a 10-second air shower to remove all dust attached to the body could one finally enter the factory.

An employee at the POSCO Future M Gwangyang cathode material plant is inspecting high-temperature heat treatment equipment for manufacturing cathode active materials in the calciner inside the plant.
[Photo by POSCO Future M]

At POSCO Future M Cathode Material Plant 1, the 'calcination' process was underway during cathode material manufacturing. Calcination is the process of adding lithium, the core material of lithium-ion batteries, to the precursor made of cathode material components such as nickel, cobalt, and manganese. On the long rail inside the factory, containers uniformly filled with cathode material were moving from the upper filling machine. There were hardly any workers inside the factory. Kim Chan-hwi, Deputy Plant Manager of Plant 1, explained, "The process continues for 18 to 22 hours a day."

Next to the rail was an automated warehouse storing raw materials to be used in this factory and finished cathode material products. Like people, all raw materials and products entering and leaving from outside are cleaned of contaminants through an air shower before entering the factory. In one corner of the warehouse, an air shooting system (an unmanned transfer system using air pressure) was installed to transport product sample capsules made on-site to the quality analysis room at a speed of 5 meters per second. Deputy Plant Manager Kim said, "It is about 1,200 meters long and can reduce the fatigue of workers who have to carry samples back and forth."

The appearance of cathode materials after high-temperature heat treatment in the calcination furnace at POSCO Future M Gwangyang cathode material plant. [Photo by POSCO Future M]

POSCO Future M Gwangyang Cathode Material Plant has the world's largest production capacity for a single plant, with an annual output of 90,000 tons. This amount is enough to produce about one million electric vehicles equipped with 60kWh capacity batteries.

Currently, cathode materials such as NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum) are produced, and in March last year, the first domestic mass production of high-nickel NCMA (Nickel-Cobalt-Manganese-Aluminum) single-crystal cathode materials began. In February, construction also started on a dedicated high-nickel NCA cathode material plant with an annual capacity of 52,500 tons on a nearby site, scheduled for completion in the second half of next year.

Lithium Raw Materials and Recycling Business Beyond Cathode Material Plants

POSCO Group is building not only the POSCO Future M cathode material plant but also a secondary battery material business complex in the Yulchon Industrial Complex, Jeonnam. Through this, they are enhancing physical accessibility for secondary battery material companies, reducing logistics costs such as raw materials, and establishing a close cooperative system. POSCO Future M's Gwangyang cathode material plant, POSCO Pilbara Lithium Solution's lithium hydroxide plant for secondary batteries, and POSCO HY Clean Metal's waste secondary battery recycling plant are located close enough to walk between.

Lithium hydroxide produced by POSCO Pilbara Lithium Solution is supplied to POSCO Future M, and the cathode materials made by POSCO Future M are supplied to battery companies and then to automakers. When batteries reach the end of their life, they are reused to make cathode materials again, forming a resource circulation system.

Warehouse view of lithium hydroxide products produced by POSCO Philbar Lithium Solution.
[Photo by POSCO]

POSCO Pilbara Lithium Solution, a joint venture between POSCO Holdings and Australia's Pilbara Minerals established in 2021, completed its first plant with an annual capacity of 21,500 tons in the Yulchon Industrial Complex, Jeonnam, last November. The second plant of the same scale is under construction, aiming for completion in September. Once both plants are completed, the production capacity will reach 43,000 tons of lithium hydroxide, enough to produce about one million electric vehicles.

The lithium hydroxide extraction methods used in the two plants will differ. The ore-type lithium production process involves leaching lithium from ore and converting it into lithium hydroxide. The first plant currently in operation applies an electrochemical method developed by POSCO. The second plant under construction will apply a chemical method used in China and other countries. A POSCO Pilbara Lithium Solution official explained, "We will apply the two technologies to the first and second plants respectively and then produce lithium hydroxide using the most efficient method."

In this way, POSCO plans to complete the secondary battery value chain by realizing a circular system from raw material procurement, manufacturing, to sales. Especially, since securing core competitiveness in secondary battery materials and pioneering innovative technologies are high-priority tasks among the seven future innovation tasks announced after Chairman Jang In-hwa's inauguration in March, the group plans to concentrate capital in this field.

Bang Jin-cheol, Deputy General Manager in charge of secondary battery materials business at POSCO Holdings, said, "In addition to financing through loans or capital increases, we will also utilize government-level financial support to decide the most efficient funding method."