South Korean steel manufacturer POSCO Holdings and Chinese battery precursor producer CNGR have started construction of nickel and precursor production plants for secondary batteries in Pohang, South Korea.

The companies will invest approximately KRW 1.5 trillion ($1.09 billion) to build the plants, and mass production is scheduled to begin in 2026.

POSCO CNGR Nickel Solution, a nickel refining joint venture (JV) with a 60:40 equity split between POSCO and CNGR, will process nickel matte with approximately 70% purity from CNGR’s nickel smelting subsidiary into 50,000 tons of 99.9% high-purity nickel annually, to be used as precursor material for batteries sufficient for 1.2 million EVs.

CNP New Material Technology, a precursor production JV with an 80:20 equity split between CNGR and POSCO Future M, will use high-purity nickel from POSCO CNGR Nickel Solution to produce 110,000 tons of high-purity nickel precursors annually. POSCO Future M plans to use these precursors to manufacture cathode materials, optimizing its internal supply chain.

Precursors determine the capacity and lifespan of secondary batteries and account for about 60% of the cost of cathode materials, but only 26% of South Korean demand was met by local production as of 2021.

“POSCO Group and CNGR will establish a stable supply chain for rechargeable battery materials based on business know-how and technological prowess and will continue to enhance business synergies,” said Jun-hyung Kim, Head of Rechargeable Battery Materials at POSCO Holdings.

Source: POSCO Holdings