POSCO Chemical Plans to Add 60 KTPA Capacity for Battery Materials in China

POSCO chemical, the chemical branch of South Korean steel major POSCO has recently announced that the company plans on expanding its production of cathodes and precursors at Tongxiang, Zhejiang province, China. The proposed plan includes a capacity addition of 60,000 tonnes per year of battery materials by 2023. 

The plan includes two plants of 30,000 tonnes per year capacity with the construction set to begin in mid-2021. One plant will be manufacturing cathodes and the other will be producing precursors. 

Both the plants will be joint ventures between Chinese company Huayou Cobalt and POSCO with POSCO having a 60% share in the cathode joint venture and a 40 % share in the precursor plant. The two partners are already running a cathode plant with a production capacity of 5,000 tonnes per year at same location. 

The plan includes an investment of USD 151.2 million in the new cathode plant and USD 88.9 million in the precursor plant by POSCO. When completed, the 35,000 tonnes per year capacity of cathodes will be catering to the power demand of 390,000 electric vehicles with 60 Kwh battery packs. By 2030, POSCO plans to have an overall capacity for cathodes of 400,000 tonnes per year. 

Cathodes are important component of electric vehicle batteries and precursor is required to manufacture cathodes. 

As per ChemAnalyst,” China’s battery materials capacity is undergoing expansion at a fast pace in the back of continuous investment from battery and automobile makers on the anticipation of a boom in electric vehicles in the upcoming years. This is expected to boost the overall demand for battery materials and provide push to the price rise. Battery grade Lithium prices are already increasing in China with the prices up 28.9% on Aug 25 at USD 17,908 per tonne as compared to prices in July.”