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Battery materials

LG Energy, POSCO invest $15 mn in Aussie battery material supplier

The deal is aimed at ensuring stable procurement of nickel and cobalt

By Jun 08, 2021 (Gmt+09:00)

EV battery system jointly developed by LG Energy Solution and GM
EV battery system jointly developed by LG Energy Solution and GM

South Korea’s LG Energy Solution Ltd. and POSCO have agreed to invest a combined 17 billion won ($15 million) in Australia's Queensland Pacific Metals Ltd. (QPM) for stable procurement of nickel and cobalt, key metals used in electric vehicle batteries.

LG Energy Solution, the split-off of chemical maker LG Chem Ltd., said on Tuesday it is buying 99.24 million new shares issued by QPM to own 7.5% of the Australian smelter for 12 billion won ($10.5 million) or A$13.5 million.

Separately, Korea’s top steelmaker POSCO said it is purchasing 45.5 million QPM shares to own 3.2% of the company for an investment of 5 billion won ($4.5 million) or A$5.8 million.

Besides the stake investments, the two Korean companies also signed separate offtake agreements with QPM to procure nickel and cobalt for up to 10 years from late 2023.

LG will purchase 7,000 metric tons of nickel and 700 tons of cobalt a year from the Townsville Energy Chemical (TECH) project operated by the Australian metal smelter.

QPM owns 100% of TECH, which aims to process high-grade ore imported from New Caledonia to make nickel and cobalt sulfate in 2013.

POSCO, which is aggressively expanding its battery materials business, will purchase 3,000 tons of nickel and 300 tons of cobalt a year from TECH over the same period.

POSCO's lithium plant near the Salar del Hombre Muerto salt flat in northern Argentina 
POSCO's lithium plant near the Salar del Hombre Muerto salt flat in northern Argentina 

LG Energy and POSCO’s combined offtake quantities will account for the majority of production from the project.

Nickel and cobalt are two key raw materials used to produce anodes used in lithium-ion batteries.

LG Energy supplies EV batteries to global automakers such as Tesla Inc., General Motors Co. and Hyundai Motor Co.

LG Energy is set to roll out lithium-ion batteries with higher nickel content later this year to increase the battery's energy density and capacity.

LG Energy, which was spun off from LG Chem in December, plans to go public this year.

Write to Jun-Ho Cha at chacha@hankyung.com

In-Soo Nam edited this article.

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