[Interview] "No Competitors Outside China" Lee Kang-myeong, CEO of Sungil High-Tech

Completion of Saemangeum 3rd Hydro Center Last Month
"Standard for Overseas Battery Recycling Plants"
Plans to Expand to Spain, Germany, USA, Indonesia
Development of Zero Wastewater Discharge and LFP Recycling Technology

Lee Kang-myung, CEO of Sungil Hightech

"Dozens of companies have declared their entry into the battery recycling business, but not many will survive."

At the headquarters of Seongil High-Tech in Saemangeum, Gunsan, Jeonbuk, CEO Lee Kang-myung became confident about the growth potential of the recycling business after starting production at the world's largest 'used battery post-processing plant' completed last month.

Seongil High-Tech completed the 3rd Hydro Center, a used battery post-processing plant, in early last month. The 3rd Hydro Center is the world's largest recycling plant capable of processing 40,000 tons annually based on the input of black powder (a black powder that serves as the raw material for battery recycling).

Battery recycling is a business that collects used batteries from electric vehicles or energy storage systems (ESS), disassembles them, and then recovers valuable metals such as lithium, nickel, cobalt, and manganese through chemical processing. Because the business model is similar to that of mining companies, it is called an "urban mine."

Battery recycling is divided into pre-processing plants that convert used batteries or scrap (by-products from battery manufacturing) into black powder, and post-processing plants that extract valuable metals from the black powder. Seongil High-Tech has both facilities. Black powder produced at overseas pre-processing plants is imported to South Korea and post-processed at Saemangeum’s plants 1, 2, and 3.

The battery recycling business is a competition of technology and cost competitiveness. Having started the business in 2000, Seongil High-Tech is already a global leader in terms of technology. Since the extracted minerals are sold at international metal exchange prices, minimizing costs is crucial. Seongil High-Tech’s biggest competitor is China. CEO Lee said, "We can compete on equal terms outside of China, so it’s worth fighting."

Seongil High-Tech has already expanded globally. It operates pre-processing plants in Poland and Hungary in Europe, and in China, Malaysia, and India in Asia. It plans to build five additional plants in Spain, Germany, the United States (Indiana and Georgia), and Indonesia. Among these, the German plant is being developed jointly with Samsung C&T, and the Spanish plant is a joint venture with a local company.

Overseas plants, which have mainly focused on pre-processing, plan to expand to include post-processing facilities. CEO Lee said, "European countries are showing movements to ban the offshore export of used batteries for resource security reasons, and in the U.S., battery recycling regulations are tightening under laws like the Inflation Reduction Act (IRA). The 3rd Hydro Center will become the standard for overseas post-processing plants."

Competition in the battery recycling industry is intensifying. CEO Lee emphasized, "Many companies lacking competitiveness in technology, cost, and raw material procurement will naturally undergo restructuring. This is not a business anyone can enter like a scrap yard." Battery recycling involves lithium, nickel, cobalt, manganese, each essentially a separate business item, with complex interrelations and high investment per unit of production, making it a high-risk industry. The entry barrier has already risen. Seongil High-Tech has invested 430 billion KRW in new and expanded plants so far.

Recently, the battery recycling industry has faced difficulties due to falling mineral prices. Seongil High-Tech recorded an operating loss of 4.9 billion KRW last year, turning to a deficit. CEO Lee said, "We expect to exit the deficit starting from the third quarter this year," adding, "Our sales target for this year is between 360 and 400 billion KRW."

Seongil High-Tech is also committed to R&D, including zero wastewater discharge systems and recycling of lithium iron phosphate (LFP) batteries. During the battery recycling process, wastewater containing sodium sulfate (NaSO4), known as "mangcho," is generated. Large-scale discharge of this wastewater raises pollution concerns. At the 3rd Hydro Center, sodium sulfate is concentrated and sold to companies that need it. They are also developing technology to reuse the wastewater itself in battery recycling.

CEO Lee said, "The technology to export only lithium from lithium iron phosphate batteries is almost complete," and added, "We are also developing technology to separate iron phosphate for use as a precursor material."