LG Chem and KEMCO establish battery recycling joint venture

LG Chem and Korea Energy Materials Company, KEMCO, has established a joint venture with the aim to produce precursor material and for the recycling of battery waste in South Korea. The production capacity is aimed at 20,000 tonnes of NCMA precursor per annum with an investment of more than 200 KRW (153 MUSD) and an anticipated production start in Q2 2024.The plant will be located in the Onsan Industrial Complex in Ulsan and will supply the LG Chem Cheongju Cathode Materials Plant.

LG Chem from South Korea is the owner of the world's second largest lithium-ion battery producer LG Energy Solutions. The company is also investing in its own cathode production for which precursor production is a key activity. KEMCO is a subsidiary to Korea Zinc Co which is part of the Youngpoong Group, a leader in both zinc and nickel production. Kemco, which entered the lithium-ion battery industry in 2017 is today a producer of nickel sulphate which is a key component in precursors. In 2021 the company started to recycle waste batteries using smelting as pre-treatment claiming recovery of Ni, Co and Cu with a 95% recovery rate and 90% of the lithium.

The joint venture will be owned to 51% by KEMCO and 49% by LG Chem. For LG Chem the joint venture gives access to precursor material while KEMCO secures a stable customer of the same. Construction of the plant will start in July 2022 and commissioning is expected from Q2 2024. The capacity of 20,000 tonnes NCMA precursor will be fed by both recycled and virgin materials. The investment marks another important step for Korean precursor production, which previously has been concentrated to China.

The company should be able to source both production scrap and end-of-life batteries. The process will most probably be based on KEMCO's already ongoing activities with the use of smelting and hydro metallurgical material recovery.

For LG Chem this is another step to secure its position as a leader in battery materials. It also gives the company a good position in securing recycled content in the batteries, something which will be increasingly important in Europe when the new battery regulation enters into force with required levels of recycled content from 2030. In April 2021 LG Chem, alongside LG Energy Solutions agreed to invest 50 MUSD in the Canadian recycler Li-Cycle with an agreement to source 20,000 tonnes of nickel over 10 years while LGES would supply battery production scrap to Li-Cycle.

Read more about the joint venture here.