A rendered image of POSCO Future M’s NCA cathode material plant in Gwangyang. (Image provided by POSCO Future M)
SEOUL, May 13 (Korea Bizwire) — POSCO Group announced on Tuesday a capital injection exceeding ₩900 billion (approximately $670 million) into its key secondary battery subsidiaries, aiming to weather a temporary slump in electric vehicle (EV) demand and reinforce its position in the battery materials sector ahead of a projected market rebound.
The move comes as the industry grapples with what analysts call an EV “chasm”—a short-term stagnation in consumer demand—and includes a major ₩1.1 trillion rights offering by POSCO Future M, the group’s flagship battery materials arm.
POSCO Holdings, the group’s parent company, said its board has approved a total investment of ₩922.6 billion in three subsidiaries involved in battery materials: POSCO Future M, POSCO Pilbara Lithium Solution, and POSCO-GS Eco Materials.
Of the total, ₩525.6 billion will go to POSCO Future M, allowing POSCO Holdings to acquire its full allotment of new shares based on its 59.7% ownership stake. The company is earmarking the proceeds for facility expansion (₩181 billion), working capital (₩288.4 billion), and investment in other entities (₩630.7 billion).
POSCO Future M plans to use the new funds to expand its production capacity of cathode and anode materials, including the completion of a cathode joint venture plant in Canada and the expansion of domestic facilities in Pohang and Gwangyang.
The remaining capital will be split between two other subsidiaries critical to POSCO’s battery materials value chain. POSCO Pilbara Lithium Solution—an 82:18 joint venture with Australia’s Pilbara Minerals established in 2021—will receive ₩328 billion to support operations at its lithium hydroxide plant in Gwangyang.
Additionally, ₩69 billion will go to POSCO-GS Eco Materials, the holding company of POSCO HY Clean Metal, which specializes in battery recycling. The firm is co-owned by POSCO Holdings (51%) and GS Energy (49%).
“This capital commitment reflects our strategy to strengthen core businesses, enhance financial soundness, and complete key investments ahead of full-scale market growth,” a POSCO Holdings official said.
The latest round of capital support underscores POSCO’s long-term commitment to becoming a global leader in battery materials, even as the current EV market faces short-term headwinds.
M. H. Lee (mhlee@koreabizwire.com)
