South Korea’s POSCO Group is set to pursue nickel refining and precursor production for electric vehicle batteries in collaboration with China’s CNGR Advanced Material Co., the world’s leading precursor company for EV batteries, and about 1.5 trillion won ($1.16 billion) will be invested.

POSCO Holdings Inc. and POSCO Future M Co. announced on Wednesday that they have signed a joint venture agreement with CNGR for cooperation in nickel refining and precursor production for EV batteries.

Precursors are key materials that determine the capacity and lifespan of batteries and they are manufactured by blending nickel, cobalt, manganese and other elements.

Under the agreement, POSCO Holdings and CNGR will establish the joint venture with a 60:40 equity ratio to produce nickel sulfate. Additionally, POSCO Future M and CNGR will establish a production venture with an 80:20 equity ratio to produce precursors using the nickel sulfate produced by the nickel refining venture.

The production capacity of the nickel refining and precursor production ventures will be 50,000 tons of nickel sulfate and 110,000 tons of precursors, respectively, on a nickel metal basis. The production of 110,000 tons of precursors is equivalent to the production capacity for batteries used in 1.2 million electric vehicles. The two plants are due to enter construction in the fourth quarter of this year at Yeongilman 4 Industrial Complex in Pohang, Korea, with the goal of mass production by 2026.

South Korea independently produces only about 13 percent of necessary precursors, relying on imports for most of them. CNGR, with its industry-leading technology in nickel refining and precursor production, along with its engineering capabilities, is expected to contribute to maximizing the production efficiency of the joint ventures.

The signing ceremony for the agreement was attended by Deng Weiming, chairman of CNGR, and Yoo Byung-ok, vice president of POSCO Holdings in charge of eco-friendly future materials, among other executives from both companies.

By Jung You-jung and Minu Kim

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