Posco Chemical signed with LG Chem to supply the latter with anode for electric vehicle batteries through end-2022, the companies said Tuesday. The deal is worth 1.8 trillion won ($1.54 billion).
An anode is a core material that determines the capacity and output of a battery.
The anode Posco Chemical will provide LG Chem is high-nickel NCM, short for nickel, cobalt and managnese. The greater percentage nickel accounts for in an anode, the better output the battery has, making it better suited to electric vehicles.
This deal inches up Posco Chemical’s high-nickel anode market dominance, and gives LG Chem a stable source of core battery material, the firms said.
Posco Chemical is currently expanding its plant facilities for anode production.
It has an area as big as 20 soccer fields at the Yulchon Industrial Complex in Gwangyang, South Jeolla Province, which can house plants with total production capacity of 90,000 tons of anode.
Posco Chemical is to have 30,000-ton anode production capacity at its Yulchon Industrial Complex plants within the first half of this year. (Posco Chemical)
A Posco Chemical official said construction completed its first stage in the third quarter of 2019, at 6,000 tons in capacity.
Another 24,000-ton facility will complete construction within the first half of 2020.
Further expansion will pan out according to demand, the official said.
Elsewhere, Posco Chemical has a 9,000-ton plant in Gumi, North Gyeongsang Province. Posco Group also has an anode producing entity in Zhejiang province, China, called ZPHE, with annual production capacity of 6,000 tons.
A Posco Chemical official refrained from sharing the list of its clients, but said that it provides for both Korean and overseas battery companies.
Posco Chemical began the cathode business in 2011 and entered the anode market around the time after merging with Posco ESM.
By Lim Jeong-yeo (email@example.com