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SEOUL, 25 September 2023: In a significant strategic move, LG Chem, in partnership with China’s Huayou Group, is venturing into the lithium-phosphate-iron (LFP) cathode materials business. This collaboration also includes vertical integration of their cathode supply chain, marking a pivotal step in the battery materials industry.
Entering the LFP Cathode Market
LG Chem and Huayou Group solidified their partnership with a comprehensive memorandum of understanding (MOU) signed on September 22, 2023. Together, they aim to enter the LFP cathode material market and reinforce their cathode supply chain. This ambitious endeavor involves the construction of four essential facilities:
- LFP Cathode Material Plant in Morocco: Situated in Morocco, home to the world’s largest phosphate rock reserves, this plant is poised to become a global hub for LFP cathode material production. With a planned annual capacity of 50,000 metric tons, mass production is targeted for 2026. This facility will cater to the increasing demand for LFP cathode materials, known for their price competitiveness compared to nickel-cobalt-manganese (NCM) cathodes. The 50,000 tons of LFP cathode materials produced here can power up to 500,000 entry-class electric vehicles.
- Lithium Conversion Plant in Morocco: LG Chem and Huayou Cobalt, a subsidiary of Huayou Group, are set to establish a lithium conversion plant in Morocco. This facility plays a crucial role in extracting lithium hydroxides and lithium carbonates, essential components for cathode material production. By 2025, the plant is expected to produce 52,000 tons of lithium annually, supplying it to the LFP cathode material plant.
Expanding Beyond LFP Cathodes
LG Chem’s foray into the LFP cathode materials business doesn’t stop with the Morocco plant. The company has plans to expand into lithium-manganese-phosphate-iron (LMFP) cathode materials—a blend of manganese and LFP offering enhanced capacity and performance.
Collaboration in Indonesia
Beyond Morocco, LG Chem and Huayou Cobalt are eyeing Indonesia as a prime location for their battery materials endeavors. Indonesia boasts cost competitiveness due to its vast nickel reserves and production capacity, making it an attractive choice for battery manufacturing and electric vehicle production.
In Indonesia, the collaboration between LG Chem and Huayou Cobalt will span several crucial areas:
- High-Pressure Acid Leaching (HPAL) Plant: The partners intend to establish an HPAL plant as part of their vertical integration strategy for the cathode materials supply chain.
- Precursor Plant: Discussions are underway regarding the construction of a precursor plant in Indonesia, with an annual production capacity of 50,000 tons. This facility would extract mixed hydroxide precipitate (MHP) from nickel ore for precursor production.
Conclusion
The LG Chem and Huayou Group partnership marks a significant development in the battery materials industry. By venturing into the LFP cathode materials business and pursuing vertical integration, they aim to meet the growing demand for sustainable cathode materials while ensuring a consistent supply chain. This strategic collaboration positions them for a prominent role in the evolving landscape of electric vehicles and clean energy technologies.
