South Korea’s largest steelmaker POSCO, which promotes electric vehicle (EV) battery materials as its new growth engine, has completed the construction of its first overseas cathode material production plant in China.
POSCO built the plant in Tongxiang city, Zhejiang Province, China, with its partner Huayou Cobalt of China. The joint venture is called Zhejiang Posco-Huayou ESM or ZPHE, with POSCO holding a 60 percent stake and Huayou Cobalt owning the rest. The plant has an annual capacity of 5,000 tons of cathode materials which are enough for 50,000 to 60,000 EVs.
The two companies initially planned to receive approval for their products from the Chinese government and start mass production in the second half of next year. However, commercial production at the plant will begin at the end of 2019, a year earlier than the initial plan, in order to enter the Chinese market in advance.
Huayou Cobalt is the world’s largest supplier of cobalt, the key ingredient for lithium ion batteries. The company meets about half of global demand for the material. It owns its own cobalt mine and nickel mine.
Based on the joint venture, POSCO will be able to stably supply materials and secure price competitiveness in the global market. The two firms have also established another joint venture to produce precursors, which is an upstream process for cathode material production, and are building a plant nearby. Huayou Cobalt has a 60 percent stake in this joint venture, with the rest being held by POSCO. Huayou Cobalt is also planning to supply raw materials, including cobalt, to domestic plants of POSCO Chemical, another cathode material manufacturer under POSCO Group.
With the completion of ZPHE, POSCO is now capable of producing 20,000 tons of cathodes a year in and outside Korea. The group’s annual production capacity will also increase to 45,000 tons when POSCO Chemical adds 25,000 tons of output next year. In addition, POSCO is planning to build additional facilities at the ZPHE plant in order to gain ground in China depending on market conditions. POSCO chairman Choi Jung-woo aims to secure 20 percent of the global market for anode and cathode materials and generate 17 trillion won (US$14 billion) in sales by 2030.
At the completion ceremony for the plant, Oh Gyu-seok, senior executive vice president of POSCO, said, “ZPHE is POSCO’s first overseas cathode material production plant and it represents the company’s determination to expand business into new growth sectors. We will continue to work with Huayou Cobalt to secure global competitiveness.”