Date: September 25, 2023. — LG Chem Ltd., announced that it has signed four memorandums of understanding (MOUs) with Huayou Group to jointly build four electric vehicle (EV) battery material plants in Morocco and Indonesia. The partnership aims to diversify LG Chem’s portfolio of battery materials. It also seeks to secure a stable supply of raw materials for EV batteries amid the global electrification trend.
According to LG Chem, the four plants will consist of a cathode plant for lithium iron phosphate (LFP) batteries and a lithium concentrate-processing facility in Morocco. In addition, there will be a nickel-processing plant and a precursor plant in Indonesia. The LFP cathode plant in Morocco is expected to start production in 2026, with an annual capacity of 50,000 tons, enough to power 500,000 entry-level EVs. The lithium concentrate-processing facility will process spodumene, a mineral that contains lithium, from Australia. The nickel-processing plant in Indonesia will produce nickel sulfate and precursors. These are key ingredients for nickel-based cathodes, as will the precursor plant.
He added that the joint venture with Huayou Group will help it expand its presence in the LFP cathode market. This market is growing rapidly due to its high safety, long life span, and low cost. LFP batteries are suitable for entry-level EVs, commercial vehicles, and energy storage systems. Currently, LG Chem produces nickel-cobalt-manganese (NCM) cathodes, which outperform LFP cathodes in terms of energy density and performance. But are also more expensive and require more cobalt.
LG Chem also said that the plants in Morocco and Indonesia will benefit from the local incentives and policies. These policies support the development of the EV battery industry. For instance, Morocco is a free trade partner of the United States, which means that the LFP cathodes produced there will be eligible for tax credits under the U.S. Inflation Reduction Act (IRA), which is designed to reduce the dependence on China for EV battery materials. Indonesia is also seeking to become a free trade partner of the United States for the same purpose.
Chairman Chen Xuehua, in a statement, expressed Huayou Group’s pleasure in collaborating with LG Chem. He said that Huayou Group will leverage its strengths in cobalt and nickel resources. He processed technology to contribute to the development of the EV battery material industry.
Both plants to start operations within the next two years, thereby contributing to the development of a robust EV supply chain and strengthening Morocco’s and Indonesia’s positions in the global electric vehicle market. This partnership underscores the continued growth and innovation within the EV industry, paving the way for a more sustainable and electrified future.