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LG Chem CEO Shin Hak-cheol (L) and Huayou Cobalt Chairman Chen Xuehua (R) sign a joint venture agreement at LG's headquarters in western Seoul on May 30 LG Chem Ltd. announced Tuesday it will set up a joint venture with Chinese mining company Zhejiang Huayou Cobalt Co. to secure a steady supply of raw materials for producing electric vehicle batteries.The chemicals manufacturing arm of LG Group explained it will turn its subsidiary located in the southern city of Gumi into a joint venture with Tianjin B&M Science and Technology (B&M,) a subsidiary of Huayou.LG and Huayou will have 51% and 49% stakes, respectively, in the joint venture. The joint venture’s accumulated investment amount will reach 500 billion won (402 million) through 2025. The current head of the anode material facility based in Gumi, Kim Woo-sung, will be the new company’s CEO. The joint venture will produce nickel, cobalt, manganese and aluminum (NCMA,) the four cathode materials needed for lithium-ion batteries used in electric vehicles.The production line’s start date for mass production is set for 2024. It is projected to have an annual capacity of more than 60,000 tons, enough to make batteries for some 500,000 all-electric vehicles, according to LG. The joint venture will help LG Chem secure a steady supply of the key metals vital to cathode production amid a rise in global raw material costs and help the Chinese firm make inroads into a foreign market, it said.Huayou will also provide precursors needed for operations through another joint venture with LG based in Quzhou, China.“We have further consolidated our vertical supply chain integration from key materials to cathodes through this joint venture,” said LG Chem CEO Shin Hak-cheol. “We will continue to grow to become the top battery materials producer known for high quality and price competitiveness.”By Kyoung ju Kangqurasoha@hankyung.comJee Abbey Lee edited this article.
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