SK, Ecopro, GEM to build Korean battery precursor plant

South Korean battery material firms SK On, Ecopro Materials and Chinese battery firm Green Eco-Manufacture (GEM) have agreed to build a battery precursor plant in Saemangeum, South Korea.

Plant construction will start this year and be completed by the end of 2024, with its capacity to be ramped up gradually, according to SK On's parent company SK Innovation on 23 March. Phase one of the plant will have at least 43,000 t/yr of capacity, said GEM, with SK On stating that the capacity will likely be around 50,000 t/yr.

The firms signed an initial agreement on 23 March to establish GEM Korea New Energy Materials, a joint venture that will produce battery precursors. They will also sign an agreement on 24 March to invest up to 1.21 trillion South Korean won ($927mn) to set up the plant.

The firms decided to invest in the Saemangeum industrial complex because of operational advantages, such as logistics infrastructure and subsidies from the Saemangeum Development and Investment Agency, SK Innovation said.

The three firms in November last year established a joint venture in Indonesia — a high-pressure acid leach (HPAL) production facility in the Morowali Industrial Park in central Sulawesi — which will provide one of the many needed raw materials for the precursor manufacturing process. The HPAL plant has a 30,000 t/yr metal equivalent capacity and will begin production in July 2024, when it will then supply the required nickel intermediate mixed hydroxide precipitate to the Saemangeum precursor plant.

The project is designed to meet the market entrance requirements set by US' Inflation Reduction Act and the Critical Raw Materials Act proposed by the EU, GEM said, as it tries to maintain its global market share and consolidate its position in the global battery materials market.

GEM has set a target of selling 500,000t of battery precursors globally by 2026.

Precursors account for 65-70pc of the cost of cathode materials used in electric vehicle (EV) batteries, and 50,000t of precursors are sufficient to produce cathode material for 300,000 units of 105kWh EVs, according to SK Innovation.

The market share of EV battery precursors could rise to 27pc in 2040 from 15pc in 2022, according to research firm Wood Mackenzie, as high-nickel chemistries dominate the market.

"SK On, which has proven its advanced technology including the development of high-nickel, will improve its global competitiveness by strengthening the supply chain of raw materials," chief administrative officer of SK On, Choi Young-chan said.

South Korea previously announced its strategy to stabilise domestic supply of key metals by reducing import dependence to 50pc and raising recycling rates of key metals to 20pc by 2030.

By Joseph Ho