POSCO breaks ground on nickel refining plant in Korea

POSCO Group, the world’s sixth-largest steelmaker, broke ground on Friday for a high-purity nickel refining plant in South Korea to meet rising global demand for electric vehicle batteries and reduce dependency on imports of the material from China amid US policies to dwarf the neighboring country’s cell industry.

POSCO said it aims to complete the construction of the plant by the first half of 2023 with an annual capacity of 20,000 tons, enough for 500,000 EVs.

The factory is built within its steel mill complex in Gwangyang, South Jeolla Province, where POSCO’s affiliate SNNC Co. is located. SNNC manufactures nickel matte, an intermediate product with a nickel content of 75%. POSCO will refine the nickel matte to raise the purity to 99.9% or higher and supply the high-purity nickel to secondary battery materials makers such as POSCO Chemical Co.

The group in July last year announced that it planned to spend 230 billion won ($160.7 million) to build the plant in line with its long-term goal to become the leader in the global EV battery market by 2030 through the establishment of a supply chain from raw materials procurement to the production of battery materials.

TO COMPLETE SUPPLY CHAIN

“We have set up our own system that handles the entire process of production and supplies from ores to high-purity nickel with the investment,” said POSCO Head of Purchasing and Investment Division Lee Ju-Tae during the groundbreaking ceremony. “We will solidify our status as a global maker that leads the secondary battery materials market.”

POSCO targets sales of 41 trillion won by 2030 through a system to produce and sell 610,000 tons of cathodes, 320,000 tons of anodes, 300,000 tons of lithium and 220,000 tons of nickel.

The new nickel refining facility is expected to help POSCO proactively respond to the US EV tax credit act that favors cells with parts made in the country or its free trade partners.

The Biden administration will require a certain percentage of critical minerals used in EV batteries to come from the US or its partners of free trade agreements to be eligible for the EV tax credit of up to $7,500 per unit, according to the Inflation Reduction Act.

The law is targeting the Chinese EV and battery industries.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Cheon edited this article.