LG Chem has signed an investment agreement with the city of Gumi to build a cathode material plant worth about KRW500 billion ($420 million). Cathode is one of the key components in batteries.
The new facility will be located on a 60,000m2 site in Gumi City’s National Industrial Complex 5. The construction of this factory will begin next year. The new facility is expected to create high quality jobs of about 1,000 people, directly and indirectly. The production capacity of the facility is expected to grow up to 60,000 tonnes by 2024. This capacity would be able to fulfil the battery needs of around 500,000 high-performance pure EVs (range of around 380kms).
The cathode material is one of the four core raw materials of the battery. It is the most important raw material that accounts for about 40% of the battery material cost and is a high value added industry with high technology barrier.
By establishing a cathode material plant in Gumi along with existing Cheongju and Iksan, LG Chem is expected to contribute to the supply-demand balance of battery core materials as well as establish a stable supply chain, and strengthen cost competitiveness. LG Chem made the investment since it needed to catch up with the demand of cathode materials due to the rapid growth of the EV battery market.
LG Chem also plans to expand the production capacity of the existing Cheongju plant to 25,000 tons, in addition to the Gumi plant. The South Korean supplier also provides automotive batteries for customers like GM and Volkswagen apart from local carmakers.