SK On will build a battery core material production facility in Saemangeum, Korea, with Korea’s largest cathode material company EcoPro, and Chinese battery materials producer GEM. It is expected to contribute to strengthening the raw material supply chain as well as creating job opportunities and revitalizing the local economy.
The three companies’ joint venture will sign an investment agreement on March 24 at Ramada Gunsan Hotel, South Korea. The signing ceremony will be attended by CEO of EcoPro Materials Kim Byung-hun, Chairman of GEM Xu Kaihua, Chief Administrative Officer of SK On Choi Young-chan, member of the National Assembly Shin Young-dae, Governor of Jeollabuk-do Kim Kwan-young, Gunsan Mayor Kang Im-joon, and Director of the Saemangeum Development Agency Kim Kyu-hyun.
Under the agreement, the three companies will invest up to KRW 1.21 trillion in this manufacturing plant. The construction of this plant is going to start within the year, and 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. It is a compound mixed with raw materials such as nickel, cobalt, and manganese. 50,000 tons of precursors can produce the cathode materials needed for batteries in about 300,000 units of 105KWh electric vehicles.
The precursors to be made at Saemangeum plant will use Nickel Mixed Hydroxide Precipitate (MHP), which is produced by a 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 Agency’s support policies and subsidy benefits, logistics infrastructure such as inland transportation and shipping related to imports and exports.
“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,” said Choi Young-chan, Chief Administrative Officer of SK On. “At the same time, we will do our best to contribute to the vitalization of the local economy and grow together with the community.”
Prior to this, SK On signed a memorandum of understanding (MOU) with EcoPro and GEM at SK Seorin Building in Seoul, South Korea on the 23rd to establish GEM Korea New Energy Materials, a three-party joint venture for precursor production. The MOU ceremony was attended by Head of SK On Battery Procurement Division Shin Young-kee, Head of SK On Global Alliance Park Sung-uk, Vice President of Ecopro Park Sang-wook, and other representatives from each company.
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, an American 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.