According to the battery industry on the 14th, LG Chem and Huayu Cobalt are reported to have entered into an investment agreement with the Saemangeum Development Authority in Gunsan on the 19th to establish precursor production facilities and decide on the site.
| ▲ LG Chem will build a precursor plant with an annual capacity of 50,000 tons in Section 6 of the Saemangeum National Industrial Complex with China’s Huayou Cobalt by investing about 1.2 trillion won. |
Precursors are compounds used as raw materials in the manufacturing process of cathode materials, and are manufactured by combining minerals such as nickel, cobalt, manganese and aluminium. It accounts for about 70% of the cathode material cost.
According to this investment agreement, LG Chem and Huayu Cobalt are believed to have invested about 1.2 trillion won to build a precursor plant with an annual production capacity of 50,000 tons in Section 6 of the Saemangeum National Industrial Complex.
LG Chem and Huayu Cobalt are said to be aiming to start construction at the end of this year and complete it by the end of 2028.
LG Chem’s construction of a precursor plant in Korea is interpreted as closely related to the US Inflation Reduction Act (IRA).
This is because, according to the US Inflation Reduction Act, countries that have signed free trade agreements (FTAs) with the US can receive subsidies in the production of batteries by producing more than a certain percentage of materials. Reporter Jangwoo Cho
