POSCO Chemical to build precursor plant for EV battery in S. Korea

South Korean secondary battery materials maker POSCO Chemical Co. said Monday it will construct a new plant in the country to manufacture precursors to meet growing demand for electric vehicle (EV) batteries.

The unit of South Korean steel giant POSCO said it will start to invest around 600 billion won (US$490 million) this year to build the plant with an annual production capacity of 100,000 tons in the southern port of Gwangyang.

Precursor is an intermediate material produced by combining new materials such as nickel, cobalt and manganese. The resulting materials are then supplied to the battery manufacturer to make the final product.

POSCO Chemical said 100,000 tons of precursors are enough for some 1.2 million EV batteries, enabling the company to reduce its reliance on imports from China for precursors.

The secondary battery materials maker said it aims to increase its precursor production capacity of 15,000 tons per year in 2022 to 185,000 tons by 2025.

Last year, POSCO Chemical decided to build a cathode and precursor plant in China with an annual production capacity of 35,000 tons and is seeking to construct another in Europe.

The EV battery market has been growing fast as global automakers rush to go electric and eco-friendly due to tighter rules on greenhouse gas emissions seen as the main culprit in global warming.