POSCO to process battery production scrap from Europe in joint venture with Huayou Cobalt

The South Korean steel giant POSCO, which since its entry in the lithium-ion battery industry in 2017 has become one of the leading cathode manufacturers in the world, announced the 28th May they are setting up a battery recycling 65/35 joint venture with Chinese Huayou Cobalt.

Through the joint venture the companies will set up a material recovery facility in Gwangyang in the Jeolla Province of South Korea where black mass from battery production waste will be processed into battery grade materials to be used in POSCO's precursor production.

The main feed will be materials from European battery production plants, most likely LG Energy Solutions in Poland from where POSCO is reported to have received battery scrap alongside its South Korean competitor Ecopro and Belgian Umicore.

POSCO's subsidiary POSCO Chemical currently has a production capacity of 44,000 tonnes of battery cathode materials per year of which 30,000 tonnes in their Gwangyang plant. In February 2021 the company announced an investment of 275.8 billion won which will bring up the capacity of the plant, which will supply all cathode material for Ultium Cells, the joint venture between LG Energy Solutions and General Motors, to 90,000 tonnes and a combined capacity in South Korea to 100,000 tonnes.

Huayou Cobalt, which itself operates a reuse and recycling plant in Quzhou in the Zhejiang province in China with a capacity of 60,000 tonnes of waste batteries, are engaged in joint ventures with both POSCO Chemical and LG Energy Solutions. It was Huayou Cobalt that enabled POSCO's entry in the cathode market through an 5,000 tpa cathode plant in Zhejiang and with LG Energy Solutions, Huayou Cobalt are producing both precursor and cathode materials. Huayou also already operate a recycling operation in South Korea through its subsidiary TMC while POSCO Chemicals has worked together with Sungeel Hitech.

With the investment POSCO Chemical contributes to solidifying a clear trend where cathode manufacturers in South Korea also take control of the secondary flows from the production. All of LG Energy Solutions' cathode suppliers are in some way also involved in processing the production scrap. Recently we have reported about similar closed loops by SK Innovation, which aims to both produce cathode material and recycle its own production waste. Samsung SDI have for a long time been using Sungeel Hitech in Hungary which is pre-processing the material in Hungary for final recovery in South Korea.

The investment is also another example of the rapid expansion of recycling capacity in South Korea following announcements from Youngpoong and Doosan Heavy in May. Earlier investments include Ecopro's new 20,000 recycling plant which is expected to be commissioned any week from now, using technology for Chinese GEM, and GS Construction's plant with a 4,500 tpa output to be commissioned in early 2022.

On top of that comes the many initiatives from both South Korean regions and the large battery and vehicle manufacturers to invest in Battery-as-a-Service and closed-loop solutions.