POSCO Chem buys stake in Chinese graphite processor

POSCO Chemical Co. has acquired a 13% stake in a Chinese graphite processor as part of the South Korean company's efforts to secure a stable supply of the key anode material used for electric vehicle batteries.

The unit of steel giant POSCO Co. has invested 4.9 billion won ($4.2 million) to buy the stake in Qingdao Zhongshuo New Energy Technology Co., which will begin the shipment of spherical graphite to POSCO Chemical from next year.

Qingdao Zhongshuo is located in Pingdu in China's eastern province of Shandong. With an annual output of 25,000 tons of spherical graphite, it is part of Haida Group, China's largest graphite mining and processing company.

Spherical graphite is manufactured after undergoing the process of removing impurities from the raw graphite. It is used in the battery anode material, one of the key components of rechargeable batteries

An anode preserves lithium ions when batteries are being charged, and affects the charging speed and lifespan of batteries.

"This investment completed our supply chain of the anode material from the mining and processing to the production of its raw material," said a POSCO Chemical official.

POSCO Chemical is South Korea's only producer of both cathode and anode materials. It supplies them to the country's three EV battery makers and Ultium Cells, a joint venture between General Motors and LG Energy Solution.

Last month, the company started producing the petroleum pitch, a material used for coating anodes, at home for the first time to reduce its dependence on imports.

In January, it acquired a 15% stake for $7.5 million in Black Rock Mining, an Australia-based mining company that owns the Mahenge graphite mine in Tanzania, Africa. 

To meet the growing demand for EV batteries, POSCO Chemical plans to boost its anode material capacity by nearly sixfold to 172,000 tons by 2025 from this year's 44,000 tons and to 260,000 tons by 2030, accounting for 13% of its global shipment.

Global demand for anode materials is forecast to grow over 22% per year to 2,054,000 tons by 2030 versus 270,000 tons in 2020, according to market tracker SNE Research. 

The company is aiming to become the world's No. 1 battery materials maker over the next 10 years, its CEO Min Kyungzoon told The Korea Economic Daily in an interview in January.

(Amended on Sept. 10 to correct the Chinese company name to Qingdao Zhongshuo New Energy Technology Co. from Qingdao Zhongshan New Energy Technology Co.)

Write to Kyung-min Kang at kkm1026@hankyung.com
Yeonhee Kim edited this article.