On Wednesday, LS Group signed a deal with the Saemangeum Development and Investment Agency, the North Jeolla Province government, the Gunsan City government and the Korea Rural Community Corp. for a joint-venture project to build a 1.84 trillion-won (US$1.4 billion) battery precursor plant in a southwestern industrial park.
The plant, which is expected to be operational by 2025, will have a production capacity of 120,000 tons a year. LS Group and L&F, a Daegu-based producer of cathodes for lithium-ion batteries, will form a 55:45 joint venture to invest 1 trillion won in the plant, with LS Group contributing an additional 840 billion won.
The groundbreaking of the plant is planned for this year. President Yoon Suk Yeol attended the signing ceremony and stated that secondary battery is one of the country’s core strategic assets along with semiconductors, and the joint investment will enable local production of precursors and a steady supply of the essential battery material.
According to Yoon, the Saemangeum area is the most suitable platform for the production of battery materials and completed battery products. A precursor is a specific chemical form containing nickel, cobalt, manganese and aluminum before it is turned into cathodes, a key secondary battery material that determines the power and range of electric vehicle batteries. Precursors account for 65-70 percent of the cost of cathodes.
Since the current government took office in May last year, 30 companies have announced investments worth 6.6 trillion won in the Saemangeum area, which is six times higher than the 1 trillion-won investment plans released during the Moon Jae-in administration, the president noted.
LS and L&F are the most recent companies in the battery components industry to join the Saemangeum complex, a reclaimed area in Gunsan, following similar projects by LG Chem Ltd. and SK On Co.