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.

Upon completion, the Green Iris will transport limestones from the port of Donghae in Gangwon-do to Gwangyang Works from the beginning of 2018.

POSCO’s high manganese steel allows the fuel tank to withstand temperatures as low as -196℃, so that it can store and transfer LNG. Moreover, it is highly weldable and cost-efficient compared to other common materials for LNG fuel tanks such as nickel steel or aluminum alloys.

POSCO developed the technology for its high manganese steel after 10 years of research since the late 2000s. Now, it is one of POSCO’s leading World Premium Products (WPP). Due to strengthening environmental regulations worldwide on emissions of sulfur oxides, nitrogen oxides and carbon dioxide from vessels, demand for high manganese steel for LNG tanks are expected to increase dramatically.

Cover photo courtesy of Gas Asia Summit.