Well aware of the crucial importance of secondary batteries, POSCO has been prioritizing the development of core materials for secondary batteries as a new growth business for years. Despite its ubiquitousness, the public remains mostly unfamiliar with the term. POSCO Newsroom reports.

What’s a Secondary Battery? Is There a ‘First’ Battery?

▲Components and the end product of a lithium-ion battery, which is a secondary battery. The areas highlighted in blue are where POSCO is focusing on as new growth areas for the future.

The answer is YES. It’s called primary battery. Simply put, a primary battery is used for clocks, remote controls, etc. Once used up, these batteries can’t be used again — an alkaline battery is the most common type of primary battery.

Unlike primary batteries, a secondary battery can be charged repeatedly. It consists of a cathode, anode, electrolytes, and a separator. Electricity is generated through the electrical flow of lithium-ion via electrolytes between cathode and anode material.

When a battery is charging, electrons flow from cathode to anode through the separator. When a battery is discharging, vice versa: electrons flow from anode to cathode. Lithium-ion batteries are one of the most common types of secondary batteries, considered essential for electric vehicles, eco-friendly thus crucial mode of transportation for the future.

What are Cathode and Anode Materials?

▲Anatomy of a Lithium-Ion Battery

Within POSCO Group, POSCO ESM is currently producing cathode materials. Despite its relatively late start, POSCO ESM stands comparison with the world’s top secondary battery active material companies in terms of technology. In recent years, POSCO ESM has become the first company in the world to mass-produce Gradient-NCM active material that contains more than 80% of nickel.

Anode materials generate electricity by storing and releasing the lithium that initially came from the positive terminal. As of now, POSCO ChemTech is the only manufacturer in Korea who mass-produces anode materials. Just this November, POSCO ChemTech completed the construction of the first anode material factory, also wrapping up the first phase of its plan by finishing the first four production lines by the second half of 2019. Through this accomplishment, POSCO ChemTech secured production capacity of 20,000 tons per annum. It plans to further expand to ten production lines, with a view to subsequently boosting the production capacity to 50,000 tons per year.

Earlier this month at its board meeting, POSCO ChemTech agreed on a merge with POSCO ESM for improved synergy between two groups’ energy materials businesses. POSCO ChemTech and POSCO ESM, who are respectively in charge of anode and cathode production, will unify as an operation headquarter for energy materials — bringing together dispersed business structures for cathode and anode materials. The merger between the two groups is expected to crystallize by April next year after the board’s final approval in February 2019.

Through the merger, POSCO ChemTech is set to step up on its effort to develop products that will lead the next generation. The merger will also augment the company’s R & D and marketing capacity, which will in turn help reinforce POSCO ChemTech’s competitiveness by reducing production costs and expanding sales effort.

Lithium-Ion Battery Advantages
As opposed to secondary batteries, primary batteries can’t be reused. Once used up, they should be discarded in which circumstance more resources are wasted to produce new batteries. There is also an additional disadvantage in that chemicals inside primary batteries can incur further environmental pollution. Secondary batteries, on the other hand, can be used for 500 to 2,000 cycles, thus more economical and environmentally sustainable.

Lithium-ion battery, one of the most typical form of second batteries, is known for its durability. Compared to other types of batteries with the same capacity, a lithium-ion battery can be produced in smaller weights and volumes. It also doesn’t carry environmental toxins such as cadmium, lead, and mercury. Furthermore, not only does lithium-ion battery have no memory effect — aka lazy battery effect — that reduces the charge capacity, it also generates more power than regular batteries.

Global Secondary Batteries Market and Where POSCO Stands

▲Production line for cathode material – POSCO ESM Factory in Gumi.

Lithium is an essential material for electric vehicles and energy storage system (ESS). In 2017, the demand for lithium was at 201,000 tons. By 2025, it’s expected to surge threefold, to 700,000 tons.

Lithium has enormous growth potential. POSCO’s endeavor for the last eight years brought them to the early stages of lithium commercialization. In 2010, POSCO became the first developer of a direct extraction technology before any other companies in the world. From 2013 to 2015, it successfully test-produced lithium in Chile and Argentina. In 2016, it built a 2,500-ton demo plant in Gwangyang Works — and since February last year, it’s producing lithium carbonate.

This year, POSCO successfully created lithium hydroxide, which is mainly used for high-performance electric vehicle batteries. POSCO’s accomplishment is especially meaningful because process control for lithium hydroxide is notoriously complicated. With POSCO’s successful localization of lithium hydroxide, Korean companies who had been exclusively relying on imports, can now be supplied with domestically produced high-grade lithium hydroxide, thus boosting the competitiveness of Korea’s lithium secondary battery industry.

┃Lithium: The Core Material for Secondary Batteries

(Source: Flickr)

Amongst all the metals, lithium belongs to the lightest alkali metal with an atomic number of 3, which means it is the third lightest substance in the world.

Recently, lithium is being identified as the rice of the future industry, or the ‘New White Oil’ because the secondary battery has emerged as a future growth industry. In addition to portable electronics like mobile phones and laptops, lithium is garnering industry’s attention as the essential material for making secondary batteries that are crucial for electric vehicles and robotics.

Compared to regular batteries, lithium-based secondary batteries produce higher voltages with less weight. The voltage of a standard battery is at about 1.3 to 2 volts, whereas a lithium-containing battery generates 3-plus volts of electricity. In addition, it is smaller and lighter than other metal ions, resulting in high energy density per unit.

┃POSCO’s Choice for the Future Fuel

▲‘Hombre Muerto’: a salt lake in Northwestern Argentina where POSCO secured the mining rights.

POSCO initially pursued a lithium business project based on a lithium extraction technology — from salt brine, but a delay in securing a salt lake posed as a new challenge. However, POSCO successfully turned this crisis into a unique opportunity, by successfully developing two innovative technologies: producing lithium from discarded secondary batteries, and extracting lithium from the ore lithium concentrate.

In October this year, POSCO also completed a facility with a capacity to manufacture lithium ore. Ore-based lithium production became a reality. From 2021, POSCO will produce lithium from a salt lake in Argentina where POSCO acquired the mining rights.

By securing the world’s only lithium production system utilizing discarded secondary batteries, lithium ore, and salt lake, POSCO is expected to produce a total of 55,000 tons of lithium per year, an amount that can produce batteries for about 1.1 to 1.2 million electric cars.

Just last month, POSCO announced ‘Top 100 Reform Challenges’ to commemorate the 100th day of the CEO Jeong-Woo Choi’s inauguration. POSCO has been leading the second batteries market by developing customized products for its clients by integrating cathode and anode material businesses and by creating a research center for secondary battery materials. By 2030, the company is gearing up to grow it into a 1.5 billion USD (an equivalent of 17-trillion KRW) business, dominating 20% of global market share.

Furthermore, POSCO ChemTech plans to expand its business areas into high value-added carbon materials by establishing a needle coke production plant, which will become the raw material for anode materials and electrodes, by utilizing the byproducts generated during the steel making process.

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.

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.  

POSCO CEO Ohjoon Kwon visits the POSCO Chemtech anode material factory and is seen examining the cathode plate coating used in secondary batteries.

“The demand for mid to large-sized secondary cell batteries for electric vehicles and energy storage systems (ESSs) is rapidly growing,” CEO Kwon said. “We will build a smart factory to produce the world’s best anode materials and secure future competitiveness in the battery material business.”

Kwon observes the anode reheating process of the production line completed last July.

POSCO Chemtech has expanded its production capacity to 6,000 tons per year through technological development and investment, but with the newly announced plant, it will have the capacity to produce 30,000 tons per year with over KRW 200 billion in sales.

Kwon has been working with POSCO Daewoo and POSCO E&C in order to increase the competitiveness of the group’s non-steel division and has also been involved with the “Innovation POSCO Project”, an initiative aimed to enhance affiliates’ competitiveness.

Kwon and other POSCO executives learn about the current status of anode materials production at POSCO Chemtech.

POSCO also supplies cathode materials for secondary cell batteries through its affiliate, POSCO ESM. In February, POSCO completed construction of PosLX, its lithium production plant, which produces lithium carbonate from lithium phosphate extracted from wasted rechargeable batteries.

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POSCO ESM produces cathode materials, which are essential for the manufacturing of secondary batteries for portable IT devices such as electric vehicles, laptops, and cell phones. Since last month, it succeeded in mass-producing ‘PG-NCM’ (POSCO Gradient Nickel Cobalt Manganese), the high-capacity cathode material for low-speed electric vehicles.* They have also been supplying these materials to LG Chem. Presently, POSCO ESM is focused on  producing  general cathode materials.

During his visit to the factory, POSCO CEO Ohjoon Kwon emphasized POSCO’s commitment to the secondary battery material business saying, “The cathode materials produced by POSCO ESM are essential for the secondary battery material business of POSCO, and we are planning to invest an additional KRW 300 billion in the cathode materials business until 2020.”

To expand the secondary battery business, POSCO acquired a 75.32% stake in POSCO ESM by issuing new stocks last January. By securing the management rights of POSCO ESM, they have laid the foundation for transforming it into a specialist for producing secondary battery materials for electric vehicles.

Despite entering the cathode materials market as recently as 2012, POSCO ESM is currently one of the only two companies in the world that can produce high-capacity cathode materials with 80% or more nickel (NCM type).

In addition to the large-capacity batteries needed for IT devices, the demand for industrial energy storage systems (ESS) for electric vehicles is increasing as environmentally-friendly policies continue to take shape around the world. The size of the global secondary battery market is expected to grow from USD 29.3 billion in 2016 to more than USD 44.2 billion by 2020.

Together with RIST (Research Institute for Industrial Science & Technology) that has research competencies in lithium, nickel, titanium and carbon, POSCO plans to capitalize on the technologies it has developed over the last 50 years to actively transform high-yield businesses such as magnesium and nickel smelting and expand its future growth options.

※ Overview of POSCO ESM

• Date of establishment: March 2, 2012
• HQ and factory: Gumi, North Gyeongsang Province
• Business: Manufacture and sale of lithium ion secondary battery cathode and anode materials
• Equity structure: POSCO 75.32%, Phoenix Materials 24.68%

※ PG (POSCO Gradient)-NCM (Nickel Cobalt Manganese)

If the nickel content exceeds 60%, the cathode material is classified as a high-capacity cathode material. PG-NCM is a product that increased the nickel content to 80% and secured thermal stability by applying POSCO’s proprietary gradient technology to design the composition of the center and surface of the cathode materials differently, thereby meeting the safety requirements of electronic devices and electric vehicles.

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Today, POSCO global blog will try to explain the basics of electric vehicles.

Pictured here: POSCO exhibit set up at The 1^st International Electric Vehicle Expo held in Jeju

What is an Electric Vehicle?

An electric car is basically an automobile that is powered by electricity. It is powered by an electric motor that runs on a rechargeable battery as opposed to a gasoline engine. Electric vehicles has gained widespread recognition predominantly because it is the environmentally-friendly alternative to gas guzzling automobiles.

Why should you care about Electric Vehicles?

Pictured here: EV on display that promotes ‘zero emissions’

 You might have heard the word ‘electric car’ lately, but might not understand what the direct benefits are. The major reasons that electric cars is top-of-mind for the auto industry and society as whole are for the following reasons:

1)      Less pollution: Electric cars are an eco-friendly alternative to gasoline powered cars as they create less pollution

2)      Cost effective in the long-run: Electric cars run on electricity so you can save up on annual car fuel costs and expensive maintenance related to oil changes, fuel filters, etc.

3)      Reduces fuel dependency: Electric vehicles can be powered by electricity produced from multiple energy sources including wind, solar, hydro, nuclear, biofuel, and fossil fuel sources. Therefore, electric vehicles have the potential to support economies while also reducing dependence on imported oil.

4)      Better Sound Quality: Electric cars may be difficult to differentiate from regular cars from the outside, but electric motors provide quiet and very smooth operation.

Challenges for Electric Vehicles

That is not to say that electric vehicles face no challenges. Driving range is a concern for consumers as gasoline vehicles can go longer distances. Recharge time and overall bulk are concerns also. Companies, including POSCO, are continuously investing time and energy to improve technologies and materials for electric vehicles.

Pictured here: Entrance to 1^st International Electric Vehicle Expo in Jeju

During March 15 through 21, the 1^st International Electric Vehicle Expo was held in Jeju Island, south of the Korean peninsula. More than 40 companies attended the event and consumers were able to see firsthand electric cars including Kia’s Ray EV, Reno Samsung SM3 Z.E., Chevrolet Spark EV, Kia Soul EV and BMW i3. Nearly 50,000 visitors came to the expo where POSCO Group showcased its innovative electric car technology.

Pictured here: POSCO exhibit at 1^st International Electric Vehicle Expo in Jeju

Of the participating companies, POSCO was the only company to offer a total solution that addresses materials, rechargeable infra and service. POSCO was the first steelmaking company to develop a body for an electric vehicle concept, solidifying its position at the forefront of electric vehicles.

POSCO Group’s <Total Solution>

Pictured here: POSCO executives gathered at the Expo in Jeju

POSCO Group companies including POSCO ICT, POSCO ChemTech, POSCO TMC and POSCO ESM were all present for the expo. As the first steelmaker to create the concept body for electric vehicles, POSCO proved that its steel solutions continue to provide value for the future of electric vehicles. The exhibit was divided into three parts consisting of rechargeable infra needed by electric vehicles, service and materials.

POSCO ICT’s electric vehicle rechargeable infra solution can be applied to all types of vehicles. Moreover, users are able to recharge without having to carry an external cable.

Pictured here: Chevrolet electric vehicle on exhibit being recharged

In addition, in order to improve the user experience, POSCO is offering a variety of convenient services. POSCO ICT has set up charging infrastructure around Jeju so travelers do not need to worry about lack of electricity. Beginning this June, POSCO ICT will form a partnership with E-Mart·BMW to offer easier charging services anytime, anywhere. POSCO ICT will also be forming a partnership with Seoul car sharing services to provide rechargeable infra.

POSCO also highlighted its commitment towards Nd magnets. Nd magnet, which is made of a rare earth metal, is an integral part of electric vehicle motors. They are currently imported from Japan and China. The Nd magnets that POSCO supplies can be applied to domestic electric vehicles and can reduce the dependency on imports.

State-of-the-Art Technology for Future Electric Vehicles

Pictured here: Compact-sized electric vehicle

Compared to internal combustion engines, electric vehicles are still trailing behind in terms of mileage and battery weight. Therefore a variety of new technologies are being applied for lightweight car bodies. For this reason, new materials beyond the previous aluminum and steel are being introduced into the development of electric vehicles.

POSCO is the first steelmaker to develop steel that is optimized for electric vehicle bodies. PBC-EV (POSCO Body Concept-Electric Vehicle) is the car body that was developed to showcase the state-of-the-art technology POSCO has recently developed for future electric vehicles.

PBC-EV has set the standard for EV steel solutions. It is made from cutting-edge steel and the latest components technology for an integrated solution that has reduced weight of 26.4% compared to previous car bodies.

Pictured here: Regular-sized electric vehicle made by Renault Samsung Motors

The Future of Electric Vehicles

As companies continue to improve and build upon existing electric vehicle technologies, the growing prominence of electric vehicles is highly probable. As an environmentally-conscious company, POSCO hopes to see more growth in this field. Would you buy an electric vehicle?