Lotte Aluminum signs $795 mn contract for cathode foil raw materials

Lotte Aluminum, a manufacturer of cathode foils for secondary batteries in South Korea, announced on Monday that it has signed a long-term purchase contract for aluminum strips worth 1.04 trillion won ($795 million) with Choil Aluminum Co.

Through the latest agreement, Lotte Aluminum, a major unit of Lotte Group’s chemical division, will receive aluminum strips, a key material for cathode foil, from Choil Aluminum and supply it to its domestic and foreign plants until 2027.

The cathode foil is used for the cathode current collector, which determines the capacity and voltage of a secondary battery that can be repeatedly charged and discharged. 

Cathode foil producers have been eager to secure a stable supply chain for thin aluminum strips as global demand increases.

"We will contribute to establishing a stable global battery material supply chain by securing solid raw material supplies. We will continue to grow together as strategic partners," said Cho Hyun-cheol, CEO of Lotte Aluminum.

Lotte Aluminium is the largest packaging material company in Korea, producing various products such as aluminum foils and medicinal/food packaging materials, and recently expanding its business portfolio centered on cathode foil for secondary batteries in line with Lotte Group's eco-friendly policies.

In 2020, the company completed the expansion of the cathode foil production line at its Ansan No. 1 plant.

In July last year, Lotte Aluminum completed a cathode foil production plant with an annual production volume of 18,000 tons in Hungary's Tatabanya Industrial Complex.

Currently, it is building the first cathode foil production base in the US with an annual capacity of 36,000 tons in Kentucky, US, in cooperation with Lotte Chemical.

By investing about 7 trillion won till 2030, Lotte Group's chemical division intends to achieve its annual sales of 7 trillion won in four major battery materials (cathode materials, cathode materials, electrolytes, and separators) and next-generation battery materials until then.

Write to Seo-Woo Jang at suwu@hankyung.com