Cosmo Advanced Materials & Technology Co. (Cosmo AM&T), a South Korean cathode material producer, is going aggressive in terms of investment ahead of a large-scale order for high-nickel nickel-cobalt-manganese (NCM) secondary batteries used in electric vehicles.

Cosmo AM&T announced Monday that its board decided to bump up the planned new investment target of 150 billion won ($117 million) in 2021 to 250 billion won.

The decision has led the company to add 11 production lines, including 2 lines in 2022, 6 lines in 2023, and 3 lines in 2024.

Cosmo AM&T’s plant in Chungju, North Chungcheong Province, will have an annual capacity of 100,000 tons by 2024.

“We decided to expand the scale of investment due to recent requests from customers to expand production capacity,” said the company spokesperson. “This investment decision is planned until 2024, so we believe that additional expansion investments can be made in consultation with customers.”

Cosmo AM&T believes that its current capacity is insufficient to meet growing customer demand. With the implementation of the U.S. Inflation Reduction Act (IRA), battery materials must be produced in the U.S. or countries that have signed free trade agreements (FTAs) with the U.S. to receive subsidies.

Under these circumstances, the company expects to generate more than 10 trillion won in sales if it has the capacity to produce more than 150,000 tons of high-nickel cathode active materials through additional investment, which is more than double the previously announced expansion plan.

Cosmo AM&T has also been developing cathode materials for existing customers and co-developing a new product with another customer since January.

It is targeting mass production testing in 2023 and commercial supply in 2024. Once the planned process is completed, Cosmo AM&T will be able to deal with all three major domestic battery companies.

The company’s precursor plant for cathode materials is also scheduled for completion in June. The completion will bring the vertical integration to Cosmo Group, with Cosmo Chemical Co. for cobalt production and waste battery recycling and Cosmo AM&T for precursor and cathode materials production.

Cosmo AM&T is also discussing with a domestic battery company to enter North America in response to the IRA.

By Yang Yeon-ho and Minu Kim

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