SK On to Build Cathode Precursor Plant; Annual Capacity 50,000T

SK On, together with Korean and foreign partners, will build a precursor production facility in the Saemangeum Industrial Area in Korea.

Precursors are key raw materials, such as nickel, cobalt, and manganese, that account for more than 65-70 percent of the production cost of cathode materials. The need for their localization has been constantly raised as Korea heavily depends on China for them.

SK On announced on March 24 that it signed an investment agreement to establish GEM Korea New Energy Materials and build precursor production facilities with Ecopro, the largest cathode material company in Korea, and Green Eco Manufacture (GEM), a global precursor company in China. The three companies have a plan to break ground for the Saemangeum plant within this year.

Under the agreement, the three companies will invest 1.21 trillion won (US$935 million) to build a precursor factory with an annual production capacity of about 50,000 tons and the goal of completing the factory in 2024. This volume can be used in the production of cathode materials required for production of 105 kWh batteries for about 300,000 electric vehicles.

Mixed hydroxide precipitate (MHP) to be used at the Saemangeum plant will be produced at a separate joint venture among the three companies in Indonesia. To this end, the three companies that had signed the agreement to establish an MHP production corporation in November of last year laid out a plan to mass-produce MHP equivalent to about 30,000 tons of pure nickel per year beginning in the third quarter of 2024.

Meanwhile, SK On is expanding partnerships to strengthen its raw material supply chain. In 2022, it signed supply contracts with lithium producers such as Chile-based SQM, and Australia-based Lake Resources and Global Lithium.

In addition, SK On signed a memorandum of understanding with Syrah of Australia to purchase natural graphite, a material for cathode materials from Syra in July last year. In January of this year, it announced the signing of a joint development agreement (JDA) with Urbix based in the United States. Moreover, it enjoys cooperative relationships with various companies such as Glencore of Switzerland and POSCO Holdings of Korea.