POSCO wins $689 mn battery material deal with GM-LG joint venture

POSCO Chemical Co., a unit of South Korean steel giant POSCO Holdings Inc., said on Dec. 5 that it has signed a $688.6 million deal to provide a key battery material to a joint venture between LG Energy Solution Ltd. and General Motors Co. for six years. 

The deal value amounts to 47.2% of POSCO Chemical’s annual revenue in 2021.

The chemical company will supply artificial graphite, used for electric vehicle battery anode, to Quebec-based JV Ultium Cells LLC from Jan. 1, 2023 to Dec. 31, 2028. The material will be used for GM's electric vehicles.

Compared with natural graphite, artificial graphite increases EV batteries’ charging speed and lifespan as it is manufactured at high temperatures and is thus more durable.

In December 2021, POSCO Chemical completed the construction of a synthetic graphite material plant in Pohang, North Gyeongsang Province, with an annual production capacity of 8,000 tons.

POSCO Chemical has joined forces with LG Energy Solution since 2020 to reduce Korea’s reliance on China in terms of EV battery materials. The chemical giant has internalized its entire anode production value chain, including needle cokes from its local subsidiary PMC Tech Co.  

POSCO Chemical plans to manufacture anode in North America and Europe, in response to new regulations on EV and EV batteries such as the Inflation Reduction Act (IRA). The company said it will increase anode production capacity from the current 82,000 tons to 170,000 tons by 2025 and 320,000 tons by 2023.

The company is the only one in Korea that produces both cathode and anode for batteries. In July, it won a $10.6 billion deal to supply high-nickel cathode to Ultium Cells from 2023 through 2025. POSCO Chemical’s plant in Gwangyang, South Jeolla Province will manufacture the cathode.   

Write to Jae-Fu Kim at hu@hankyung.com
Jihyun Kim edited this article.