Chemco CEO Choi Nae-hyun (left) and LG Chem Vice Chairman Shin Hak-chul (right). (Photo courtesy of LG Chem)


Establish a precursor plant in Onsan Industrial Complex by investing over 200 billion won by 2024
Securing an annual precursor production capacity of over 20,000 tons through the application of recycled metals, etc.

LG Chem is strengthening its battery material value chain by establishing a joint venture for recycling and precursors with KEMCO, a subsidiary of Korea Zinc.

LG Chem announced on the 2nd that it had signed a contract to establish a joint venture with Chemco at the Korea Zinc headquarters in Nonhyeon-dong, Seoul.

Key officials, including LG Chem Vice Chairman Shin Hak-chul, Korea Zinc Vice Chairman Choi Yun-bum, and Chemco CEO Choi Nae-hyun, attended the signing ceremony held on the 31st of last month.

The name of the joint venture is 'Korea Electric Power Corporation', and it consists of a 51% stake held by Chemco and a 49% stake held by LG Chem.

Precursors are manufactured by combining nickel, cobalt, manganese, aluminum, etc., as raw materials for cathode materials, and are an important material that accounts for about 70% of the cathode material cost.

It will be constructed within the Onsan Industrial Complex in Ulsan Metropolitan City as a dedicated line for NCMA (nickel, cobalt, manganese, aluminum) precursors for next-generation electric vehicle batteries, which LG Chem is intensively developing.

We plan to invest a total of over 200 billion won by 2024 to secure an annual production capacity of over 20,000 tons of precursors, including the application of recycled metals.

Construction is scheduled to begin in July of this year, and mass production of the product will start in the second quarter of 2024 and supply it to LG Chem's Cheongju cathode material plant. The projected revenue for 2025 is approximately 400 billion won.

The joint venture produces precursors by utilizing not only metal produced and supplied by Chemco but also recycled metal extracted from waste scrap and waste batteries.

In particular, the joint venture's recycling process combines dry and wet processes to maximize the metal recovery rate compared to existing processes.

We plan to proactively respond to increasingly stringent global environmental regulations by adopting eco-friendly processes that minimize the emission of hazardous substances, including wastewater recycling during the extraction process.

Through this joint venture, LG Chem has secured recycling capabilities and a stable supply of high-quality nickel sulfate, while Chemco has secured reliable demand sources in the domestic market and expanded its portfolio of battery materials business.

Chemco possesses top-tier global capabilities through an annual nickel sulfate production capacity of 80,000 tons. In addition, based on the non-ferrous metal smelting technology of its parent company, Korea Zinc, it possesses specialized technology for extracting key battery raw materials such as nickel, cobalt, and manganese.

LG Chem CEO and Vice Chairman Shin Hak-chul stated, “This joint venture holds great significance in strengthening the foundation for leaping forward as the world’s leading comprehensive battery materials company,” adding, “We will continue to drive uninterrupted growth in the eco-friendly battery materials business through bold investments and collaborations.”

"Although raw materials are a global issue, the nickel secured by Chemco has had no choice but to be exported overseas," said Chemco CEO Choi Nae-hyun. "Based on our world-class metal refining capabilities, we will contribute to the localization of precursors, which is the missing link in the Korean battery industry."