SK On will partner with Korea’s largest cathode material company EcoPro, and Chinese battery materials producer GEM to build a battery core material production facility in Saemangeum, South Korea. The three companies together will spend up on 1.21 trillion won (US$934 million) for what will be their second joint venture after the nickel MHP producing joint venture founded in Indonesia last year.
The construction of this plant will start within the year, and is expected to be completed in 2024 with an annual production of about 50,000 tons of precursors. The capacity of this facility is planned to increase sequentially, and more than 1,000 people will be hired to work here.
Precursors are key raw materials that account for more than 65% to 70% of the cost of cathode materials. 50,000 tons of precursors can produce the cathode materials needed for batteries in about 300,000 units of 105 kWh electric vehicles.
The precursors to be made at Saemangeum plant will use Nickel Mixed Hydroxide Precipitate (MHP), which is produced by the joint venture of the three companies in Indonesia, as a raw material. This joint venture is the one that SK On, EcoPro, and GEM agreed to establish in November last year, and is expected to mass-produce MHP equivalent to about 30,000 tons of pure nickel annually from the third quarter of 2024.
The three companies decided to invest in the Saemangeum Industrial Complex in consideration of various operational advantages, including the Saemangeum Development and Investment Agency’s support policies and subsidy benefits, logistics infrastructure such as inland transportation and shipping related to imports and exports.
SK On has been actively building various cooperative relationships to strengthen the raw material supply chain. Last year, it signed supply contracts with lithium producers such as SQM (a Chilean company), Lake Resources, and Global Lithium (both from Australia).
Regarding anode materials, SK On signed a MOU with Syrah, an Australian company, for the supply of natural graphite in July last year. SK On also announced the signing of a joint development agreement (JDA) with Urbix, a US manufacturer of battery anode materials, in January this year. In addition, SK On has been cooperating with various companies such as Swiss Glencore and POSCO Holdings for raw materials business.