Detailed Plan to Be Announced in Nov. at the Earliest
The U.S. state of Tennessee has emerged as a strong candidate site for LG Chem's planned cathode material plant in North America.
LG Chem is considering building a cathode material plant on an area of about 1.69 million square meters in Clarksville, Tennessee, according to foreign media reports. The project cost is estimated at trillions of won. LG Chem is expected to announce a construction plan at the end of November as early as possible.
LG Chem is planning to expand its cathode material production capacity from 80,000 tons per year at the end of last year to 90,000 tons in 2022 and to 260,000 tons by 2026. Advanced materials, including cathode materials, accounted for only 6 percent of LG Chem's total operating profit in the third quarter of last year. But the percentage rose to 46 percent in just one year.
At the moment, LG Chem is running cathode material plants in Cheongju, Korea and Wuxi, China. In January, it broke ground for a cathode material plant in Gumi, Korea and the plant is scheduled to start operations in 2024. It has no production bases in North America yet. However, as the U.S. Inflation Reduction Act requires battery makers to use minerals from North America or countries that have signed free trade agreements (FTAs) with the United States to be eligible for subsidies, battery makers are in a growing need to establish local production lines in the United States.
Korean battery material companies have declared their advancement into North America one after another. POSCO Chemical, the only company in Korea that produces both cathode and anode materials, plans to establish a joint venture named “Ultium CAM” with GM and build a joint high-nickel cathode material plant with an annual capacity of 30,000 tons in Quebec, Canada.
EcoProBM will also build a cathode material plant in Quebec, Canada by partnering with Ford and SK On. SKC's copper foil subsidiary, SK Nexilis, is considering establishing production bases in both the United States and Canada at the same time. LG Chem announced that it would build a plant in North America for separators as well as cathode materials.