POSCO Chemical will supply core materials for electric vehicle (EV) batteries worth up to two trillion won (about US$1.7 billion) to LG Chem over the next three years.
POSCO Chemical and LG Chem will sign a supply contract for anode materials, a key material for EV batteries, this week.
The contract will hold for three years and the supply volume is estimated at around 125,000 tons, which is enough to produce batteries for one million EVs capable of running about 400 kilometers on one single charge. POSCO Chemical's anode materials will go into EV batteries that LG Chem produces at its plant in Ochang for domestic consumption. If POSCO Chemical increases production volume in the future, some of them will be supplied to factories in China.
POSCO Chemical could strike a deal on the large-volume supply of anode materials with LG Chem as the two sides shared common interest, chemical industry insiders say. POSCO Chemical is expected to increase its sales and market share in the core material field of EV batteries, which are emerging as a high-growth item that can be as valuable as semiconductors.
LG Chem is expected to secure core material supply from POSCO Chemical. LG Chem recently decided to set up a joint venture with GM, the largest automaker in the United States, and is pushing forward with a project to establish a battery joint venture with Hyundai Motor, the first-ranking carmaker in Korea.