As part of its effort to venture into the global lithium iron phosphate (LFP) market, LG Chem Ltd. signed a memorandum of understanding with China’s Huayou Group on the supply of the cathode material.

According to the partnership, LG Chem and Huayou Group subsidiary Youshan will form a joint LFP cathode plant with an annual production capacity of 50,000 metric tons in Morocco. Mass production will start by the year 2026 and the target capacity is enough to produce 500,000 entry-level electric vehicles (EVs). The LFPs produced at the Morocco plant will then be supplied across North America.

Morocco accounts for around 73 percent of the world’s phosphate rock reserves, which is a core material in LFP cathode, with 50 billion metric tons. The region is one of the United States’ free trade partners, which makes the plant eligible for subsidies under the Inflation Reduction Act.

LG Chem is also poised to build a lithium conversion plant, or a facility dedicated to separating lithium hydroxide and lithium carbonate from lithium ore concentrate, in collaboration with Huayou Cobalt Co. The conversion plant will begin mass production with a 52,000-ton capacity by 2025, with plans to supply lithium products to the Morocco LFP plant.

In a separate partnership, LG Chem and Huayou Cobalt agreed to build a vertical supply chain that includes nickel refining and precursor facilities. The two parties will mull a plan for a precursor plant with an annual production capacity of 50,000 metric tons and then a separate plant to extract mixed hydroxide precipitate from nickel ore for precursor production.

“The Morocco cathode plant will play a pivotal role in our plans to tap to the fast-growing LFP cathode market,” according to LG Chem Vice Chairman Shin Hak-cheol.

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