POSCO Chemical to build 60,000-ton-capacity cathode plant

POSCO Chemical, North Gyeongsang Province and Pohang City sign an investment agreement for a cathode plant. From second to left, POSCO Chemical CEO Min Kyung-joon, North Gyeongsang Province Governor Lee Cheol-woo and Pohang Mayor Lee Kang-deok and other local government officials. Courtesy of POSCO Chemical

By Kim Hyun-bin

POSCO Chemical is scheduled to build a new cathode material plant in the southeastern port city of Pohang, with an annual production capacity of 60,000 tons.

Cathodes are a key material in electric vehicle (EV) batteries and the 600 billion won ($525 million) plant is being built to meet rising demand for EVs.

POSCO Chemical CEO Min Kyung-joon, North Gyeongsang Province Governor Lee Cheol-woo and Pohang Mayor Lee Kang-deok attended a ceremony at Pohang City Hall, Thursday, to sign an investment agreement for the plant.

“In cooperation with North Gyeongsang Province and Pohang City, which have been evolving as the center of the battery industry, we will build a top-tier production base,” POSCO Chemical CEO Min Kyung-joon said.

However, the company did not specify when construction will commence or when the plant is expected to be completed.

When the new cathode plant goes into operation, POSCO will be able to produce 160,000 tons of cathodes per year, which is enough to supply 1.8 million EVs with 60kWh battery packs, the company said.

POSCO Chemical currently operates two cathode material plants in Gumi, North Gyeongsang Province, and Gwangyang, South Jeolla Province. The company is also searching for a suitable overseas location in the U.S., Europe or China for a new plant with an annual production capacity of 110,000 tons to meet its goal of becoming a top global secondary battery material manufacturer by 2025.

Currently, LG Energy Solution (LGES) and General Motors are major partners and POSCO is considering building plants in Europe and the U.S.

LGES is currently building a new EV battery factory in the U.S. state of Ohio scheduled to be completed in 2022. LGES said it will partner with GM to construct a second $2.3 billion EV battery plant in the U.S. state of Tennessee, another potential location for a new POSCO plant.

POSCO Chemical also seeks to increase its production capacity from 40,000 tons of cathodes a year to 270,000 tons by 2025 and 400,000 tons by 2030. The company aims to produce at least 160,000 tons from local production and 110,000 tons from overseas plants by 2025.The investment plan comes as the EV industry is growing rapidly due to rising global demand, while some carmakers have been looking into manufacturing their own automotive rechargeable batteries. All of these developments signify increased demand for cathodes. POSCO Chemical believes that the next two to three years will be a golden opportunity to secure the lead in the secondary battery materials sector.

POSCO Group has been speeding up efforts to boost its EV business in recent years as part of its diversification strategy. In May, POSCO broke ground for a plant in Gwangyang to extract lithium hydroxide, a key material for EV batteries.

According to a UBS report, the size of the global EV market stood at 3 million vehicles in 2020, but is expected to rise to 35.5 million by 2030.

POSCO Chemical to build 60,000-ton-capacity cathode plant
Source: Buhay Kapa PH