LG Chem and China's Huayou team up to produce battery materials

Lim Chang-won Reporter Posted : 2018-04-11 10:44 Updated : 2018-04-11 10:44
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[LG Chem]

SEOUL -- Huayou Cobalt, a major cobalt supplier in China, has teamed up with South Korea's LG Chem for the joint production of key materials for lithium-ion batteries which are used widely for electric vehicles.

LG Chem said Wednesday that it would invest 240 billion won (226 million US dollars) in two joint factories with Huayou Cobalt to produce precursor and cathode materials with an annual production capacity of 40,000 tons each. Production will begin in 2020.

LG Chem, one of the world's largest lithium-ion batteries, said that the partnership with Huayou Cobalt would enhance its global competitiveness. LG Chem, which has a battery plant in China, is building another plant for electric vehicles in Poland.

On Tuesday, LG Chem disclosed its plant to issue convertible bonds worth 600 million US dollars on the stock exchange in Vienna to raise money for an investment abroad. The three-year unguaranteed bonds to be issued in US dollars and Euros together would carry a zero interest rate.

Huayou Cobalt, based in Zhejiang Province, said its subsidiary, Huayou New Energy, and LG Chem would establish a joint venture named Huajin New Energy Materials in Zhangzhou to produce precursor materials and Leyou New Energy Materials in Wuxi to produce cathode materials.

Huayou owns 51 percent of Huajin and 49 percent of Leyou. The remainder will be controlled by LG Chem each.