Huayou Cobalt is one of the world’s biggest mining companies that can produce about 50 percent of the cobalt required for manufacturing lithium-ion batteries worldwide. They also have their own nickel mine in addition to a cobalt mine.

The joint venture for precursor production is made up of 60 percent of investments by Huayou Cobalt that can supply cobalt, nickel and manganese, and 40 percent by POSCO. 60 percent of investments for the joint venture for cathode material production comes from POSCO who owns the high-grade cathode material production technology and 40 percent of investments come from Huayou Cobalt. The joint ventures will be operating production lines for 4,600 tons of precursors and cathode materials a year starting from the second half of 2020.

POSCO and Huayou Cobalt sign agreements for joint ventures in cathode material supply and production.

Through these joint ventures, POSCO can now secure its market position in China by directly manufacturing and selling cathode materials locally. In addition, it can gain a competitive edge by securing a stable supply of not only precursors but also materials such as cobalt, nickel and manganese for POSCO ESM’s cathode materials plant in Gumi. Huayou Cobalt can expand its business in manufacturing and sales of cathode materials in addition to that of raw materials.

As the eco-friendly policies of the world continue to be tightened, the demand for electric vehicles, industrial energy storage systems (ESS) and IT bulk batteries has increased rapidly. Thus, the market for cathode materials, which are essential materials for lithium-ion batteries, is also expected to quadruple from 210,000 tons in 2016 to 860,000 tons in 2020.

Accordingly, the price of cobalt, one of the most expensive materials, tripled in the last two years, followed by the price of nickel and manganese. This explains why a stable supply of materials is essential for profitability.

POSCO’s lithium-ion battery material business is headed for future growth, and is expected to gain increased momentum with the joint ventures for precursors and cathode materials. POSCO completed its carbon lithium plant PosLX at Gwangyang Steelworks last year after 7 years of developing its own proprietary technology of directly extracting lithium in 2010. It is currently under commercial production.

EVs will make up 54 percent of new car sales in 2040. (Source: Electrek)

Even though EVs make up about 1 percent of total new car sales in the U.S., EVs are on a steady, steep path upwards. According to a report by Bloomberg New Energy Finance, EVs will make up 54 percent of new car sales by 2040, and by 2029, EVs will be cheaper to buy than gasoline and diesel-fueled cars.

The figures are significant and will translate into a sharp increase in demand for rechargeable batteries and their materials.

SEE ALSO: Ask an Expert: Electric Vehicles and the Future of the Automotive Market

The Evolution of EV Batteries

Before diving into the juicy details, it’s always helpful to cover the basics. Batteries are made up of 3 main components. The anode, or negative electrodes, the cathode, or positive electrodes and some type of electrolyte through which the electrodes travel to release chemical energy.

A simple battery can be made out of a potato, copper penny and galvanized nail. (Source: Tested)

The first rechargeable battery, lead-acid battery, was invented in 1859 by a physicist named Gaston Plante. Lead dioxide was the cathode material used, and lead was the anode material with a liquid solution of sulphuric acid and water as the electrolyte. The materials were affordable and the battery was applied to many early models of EVs, including early models of the Tesla Model S.

Another widely used battery that came after the lead-acid battery is the nickel-metal hydride (NiMH) battery developed at the Battelle-Geneva Research Center in 1967. Nickel hydroxide was used as the cathode material while a hydrogen-absorbing alloy was used as the anode material. A liquid solution served as electrolytes. The research for NiMH batteries was extensive, and funded jointly by Daimler-Benz and Volkswagen AG. The batteries were also applied to many EV models such as the Toyota Prius, prior to 2015.

The Advent of Lithium-Ion Batteries

The introduction of lithium-ion batteries was a game-changer. Sony first introduced them in 1991, and today, most EVs have them, including the Tesla Model 3. The batteries consist of lithium-cobalt oxide cathodes, graphite anodes and the electrolyte is usually a solution of lithium salt and an organic solvent, though some automakers are experimenting with solid-state electrolytes.

The Tesla Model 3 has a lithium-ion battery. (Source: Green Car Reports)

Compared to its predecessors, lithium-ion batteries have the highest amount of stored energy and specific power, which is kind of like horsepower for electric cars. As a result of improved technology and lower costs, lithium-ion batteries are projected to make up 70 percent of the total rechargeable battery market by 2025, which will be worth roughly USD 112 billion.

Good as Gold

It is estimated that every 1 percent increase of EVs in the auto market will result in an additional 70,000 tons of lithium demand LCE per year.

In 2016, Australia topped the list for the most lithium produced with 14,300 metric tons. China and Zimbabwe are also top contenders producing 2000 and 900 metric tons in 2016, respectively. Then, there are the South American countries of Argentina, Chile, and Bolivia, also referred to as the “lithium triangle,” and home to 75 percent of the world’s lithium supply.

Workers at a brine pool at the Rockwood Lithium Plant on the Atacama salt flat. (Source: Reuters)

Does that mean the world has enough lithium to fuel the cars of tomorrow? The answer is yes, but there aren’t enough mines to produce them. In order to prevent environmental damage and the exploitation of unprotected workers, lithium producers have to get smart about lithium mining and production.

[clickToTweet tweet=”It is estimated that every 1 percent increase of EVs in the auto market will result in an additional 70,000 tons of lithium demand LCE per year- Visual Capitalist” quote=”It is estimated that every 1 percent increase of EVs in the auto market will result in an additional 70,000 tons of lithium demand LCE per year- Visual Capitalist” theme=”style6″]

POSCO’s Lithium Production  

Starting in 2010, POSCO and the Research Institute of Industrial Science & Technology (RIST) teamed up to develop a chemically based lithium extraction technology. The innovation cut down extraction time from up to 18 months down to between 8 hours and 1 month, delivering a purity rate of 99.9 percent. The recovery rate of lithium also increased to over 80 percent. POSCO is the world’s first corporation to commercialize the technology.

SEE ALSO: Lithium Rocks: POSCO at Forefront of a Green Energy Future

POSCO CEO Kwon Ohjoon holds lithium on his visit to PosLX, POSCO’s battery production factory in Korea.

It’s also at the heart of the lithium triangle. POSCO currently operates facilities in Chile’s Maricunga Salt Lake, Argentina’s Cauchari Salt Lake and Argentina’s Pozuelos Salt Lake, which alone will boost POSCO’s annual lithium production to 2,500 tons. POSCO also opened its first battery production plant in Korea earlier this year.  

The future of EVs is promising thanks to advancements being made in electric batteries, and there’s a lot at stake for the health and well being of future generations. Increasingly, the availability and costs of EV battery materials will play a vital role in market outcomes and widespread EV adoption. It is vital for companies like POSCO to provide abundant, sustainable and cost-friendly EV battery materials so automakers can continue to enhance the batteries of tomorrow’s cars.

Cover photo courtesy of Quartz.

POSCO continues to contribute to the growing steel industry by producing large amounts of high-quality steel for its partners, and has its sights on non-steel businesses as well. The continued efforts to stay ahead of global trends, provide solutions to partners as well as to produce the highest quality steel are what keep POSCO in the top ranks.

Here are 6 more memorable highlights from 2017 so far.

1. POSCO’s First Lithium Extraction Plant

On February 7th, POSCO opened its first lithium extraction plant, PosLX at Gwangyang Works in Korea. It is expected to produce 2500 tons of lithium carbonate per year, making POSCO the first company to produce lithium on a commercial scale in Korea.

The opening ceremony of PosLX

Traditionally, the process of extracting lithium takes 12 to 18 months. In comparison, POSCO’s new, sustainable technology only requires as little as 8 hours up to a maximum of one month to extract high-purity lithium. The materials produced at PosLX will supply LG Chem, Samsung SDI and POSCO ESM, a subsidiary company that specializes in cathode materials for secondary batteries.

2. Leading Supplier of Electric Steel Plates

On February 20, POSCO opened its newly-expanded, non-oriented silicon steel facility for producing environmentally-friendly electric vehicle drive motors. The expansion increased POSCO’s output of non-oriented silicon steel (Hyper NO) from 80,000 to 160,000 tons, making POSCO the leading supplier of electric steel plates both domestically and internationally.

POSCO CEO Ohjoon Kwon at the non-oriented silicon steel facility (Source: MK News)

The demand for environmentally friendly vehicles is growing, and with it the demand for top-grade electric steel plates. In 2020, the projected demand for such parts will reach more than 1 million tons. POSCO has its eyes on the market, aiming to develop high-quality, customized materials for electric vehicle manufacturers.

3. Release of POSCO’s GIGA STEEL Ad

In March, POSCO ran a nationwide TV ad for POSCO GIGA STEEL in Korea to showcase the superiority of POSCO’s next-generation automotive steel material. This is the first time POSCO put out a specific steel product and not the company brand at the forefront of an ad campaign. In order to convey the strength and light weight of the product, the advertisement included a strength test comparing GIGA STEEL to aluminum. The test proved POSCO GIGA STEEL to be over three times stronger than aluminum.

4. Commercialization of a High Manganese Steel Production Technology

In April, POSCO commercialized the world’s first high manganese steel production process technology using molten manganese ferroalloy (FeMn). This technology takes place at PosLM (POSCO Liquid Manganese), a heat insulation facility that can store high-purity molten ferromanganese alloy. The technology boosts profitability by reducing the processing time by half and increasing production efficiency by more than 10 percent using a non-solid type of molten iron.

Hot Liquid Steel

5.  Completion of 7CGL for POSCO GIGA STEEL

On April 26, POSCO completed the world’s first steel plate factory specifically for GIGA STEEL. 7CGL, which has an annual production capacity of 500,000 tons, is attracting attention as the world’s first factory to produce both GA (hot-dip galvannealed) and GI (hot-dip galvanized) steel plates among 1.5-class automobiles. POSCO secured its position as a global automotive steel plate maker through the completion of 7CGL, its 12th steel plate factory. POSCO has been able to reduce investment costs and secure cost competitiveness by carrying out both factory design and construction internally.

Opening ceremony for 7CGL (Source: Business Korea)

6. Completion of POSCO’s Steel Forming Laboratory

On May 11, POSCO completed their Steel Forming Laboratory at the POSCO’s Global R&D Center in Songdo, Korea, built to provide customized support for partners. POSCO is building a one-stop development system from technology development to production verification. At the core of this program is the advanced customer-oriented research infrastructure that can evaluate products in advance and develop leading technologies in a production environment similar to that of POSCO’s customers. This development will further strengthen POSCO’s solution marketing 2.0.

The Steel Forming Laboratory at POSCO’s Global R&D Center

Despite a difficult market environment, POSCO continues to provide high-quality steel products for its partners through close cooperation and customized research. Additionally, POSCO’s expansion into non-steel sectors will not only bring added value, but help POSCO stay ahead of the changes the fourth industrial revolution will bring.