LG Chem has agreed to establish a new joint venture with Kemco, a subsidiary of Korea Zinc Company, dedicated to recycling precursor materials to help secure a stable supply of components for electric vehicle (EV) batteries.

The two companies plan to spend over US$159 million on a plant with annual production capacity of 20,000 tons of recycled precursors materials for EV battery cathodes and anodes.

The facility will focus on processing nickel sulphate for next generation NCMA (nickel, cobalt, manganese, aluminium) batteries for EVs.

The plant, which will be owned 51% by Kemco and 49% by LG Chem, is scheduled to be completed by 2024 in the Onsan Industrial Complex in Ulsan to supply the nearby LG Chem Cheongju Cathode Materials plant.

The joint venture will produce precursors using not only metals produced and supplied by KEMCO, but also recycled metals extracted from waste scrap and waste batteries.

With this joint venture, LG Chem will be able to receive a stable supply of high-quality nickel sulfate, while procuring recycling capacities, and KEMCO will procure a stable client in the domestic market as it expands its battery materials business portfolio.

KEMCO possesses one of the top capacities in the world through its nickel sulfate production capacity of 80,000 tons per year. Furthermore, based on the nonferrous metal smelting technologies of its mother company, Korea Zinc, it possesses expert technologies for extracting core raw materials for batteries such as nickel, cobalt, and manganese.

LG Chem CEO Hak Cheol Shin said in a statement: “This joint venture is very meaningful in that our platform is becoming strengthened to become the world’s best comprehensive battery materials company. We will achieve ceaseless growth in the eco-friendly battery materials business through bold investments and collaboration.”

KEMCO CEO Choi James Soung commented, “Despite raw materials being a key issue throughout the world, nickel procured by KEMCO had nowhere else to go but for exports until now.” He went on saying, “Based on our world-leading metal smelting capabilities, we will contribute to the localization of precursors, which is the missing link in the Korean battery industry.”