SEOUL, March 21 (Korea Bizwire) — POSCO Future M Co., a leading South Korean battery components maker, said Tuesday it is building a new cathode plant in the country’s southeast to meet surging demand after its multibillion-dollar supply deal with Samsung SDI Co.
The board recently approved the plan to spend 392 billion won (US$300 million) for a high-nickel cathode factory in its main industrial complex in Pohang, about 270 kilometers southeast of Seoul, the chemical materials unit under POSCO Holdings Inc. said in a release.
The new cathode factory, aiming to start commercial production in 2025, will be dedicated to manufacturing cathodes consisting of lithium, nickel, cobalt and aluminum (NCA), and the output will be delivered to battery maker Samsung SDI.
In January, POSCO Future M, then POSCO Chemical, said it signed a 10-year contract with Samsung SDI to supply the key component in electric vehicle (EV) battery cells starting this year in its largest-ever 40 trillion-won deal.
The NCA factory will have a production rate of 30,000 tons a year, equivalent to powering about 300,000 units of 60 kilowatt-hour EVs, POSCO said.
Cathodes determine the power and range of EV battery cells. They account for more than 40 percent of a cell’s production cost.
The NCA cathode plant will boost POSCO Future M’s cathode production capacity to 60,000 tons annually in Pohang alone by 2025, once its 30,000-ton cathode factory under construction on the same site gets up and running next year.
POSCO Future M also runs a cathode plant in the southwestern city of Gwangyang, about 300 km south of Seoul, that has an annual production capacity of 90,000 tons.
POSCO Future M has been expanding its battery materials business since its advance into the sector in 2012, clinching a 13.7 trillion-won contract to supply Ultium Cells LLC, a joint venture between LG Energy Solution Ltd. and General Motors Co.
POSCO Future M is building a high-nickel cathode plant in Canada under its own joint venture with GM.
Aside from the high-nickel based cells, POSCO Future M said it is working on the development of cathodes for lithium iron phosphate (LFP) batteries to diversify its lineup.
LFP batteries have increasingly gained traction due to cheaper costs than NCA or NCMA cells that include manganese, but their lower energy density compared to the high nickel-based cells remains a challenge.