(Yicai Global) April 13 -- Driven by high market potential in new energy vehicles, China's cobalt industry leader Huayou Cobalt Co. established joint ventures with South Korean companies in an effort to foster further growth through the development of battery cathode materials, which are widely used in the NEV industry.
“We have set up joint ventures with POSCO and LG Chem Ltd. this year to provide precursors and cathode materials, which will maximize the values of the company's existing products in the industrial chain," news site The Paper reported, citing Fang Yuan, deputy general manager of Huayou Cobalt yesterday.
The company plans to set up two power battery cathode material development companies with South Korea’s LG Chem through a wholly-owned subsidiary. The joint venture, established in Ganzhou, South China’s Jiangxi province, has a total investment of USD159 million, with Huayou Cobalt holding a 51 percent stake. It invested USD746 million in the joint venture in Wuxi, the eastern Jiangsu province, to own a 49 percent stake.
The first phase of the two JVs is to reach an annual output of 40,000 tons of cathode materials, which will be expanded to 100,000 tons in the future, the companysaid in a statement on April 11.
Huayou Cobalt also established two joint ventures with POSCO in Tongxiang, the eastern Zhejiang province, on January 11, with investments of about CNY1 billion (USD159 million) and CNY930 million respectively, taking 60 percent and 40 percent stakes. However, the company did not disclose the planned production capacity of the two joint ventures.
“As an upstream and midstream company, we have resources and cobalt smelting products. With the joint venture, the company aims to extend the industrial chain and put full use of the upstream resources and midstream smelting products,” Fang said in an industrial summit.
"We hope to enter the new energy vehicle market and the world-class automotive plant supply chain, including the European car brands, through joint ventures with the two well-known South Korean companies,", Fang said, adding, "The company has a production capacity of 20,000 tons of Lithium-nickel-cobalt precursor, mainly in model 523 (ternary material model), with model 811 being on the way. And high nickel would be the trend.”
The so-called 811 refers to high nickel ternary materials, which are NCM111, NCM532, NCM622, NCM811 and others in the order of nickel content from low to high.
Huayou Cobalt is the largest supplier of cobalt products in China. Its output and production capacity of cobalt salt products rank among the top in the world. The company has deep ties in Democratic Republic of the Congo, a major cobalt producer, in central Africa with self-sufficient raw materials and advantages in raw material costs comparing with other domestic smelters.
Editor: Mevlut Katik