South Korea: POSCO Chemical-General Motor to jointly build cathode plant in Canada

POSCO Chemical and General Motors (GM) will jointly build a cathode plant in Quebec, Canada, to use it as a forward base for establishing a supply chain for North American battery core materials.

The plant will be built in Becancour, Quebec, Canada, an investment of $400 million in the first phase which is scheduled to be started in CY'23. The plant will produce high-nickel cathode materials for General Motors' electric vehicle batteries.

POSCO and GM decided that Becancour, Quebec as an ideal location due to benefits like raw material and logistics facilities being adjacent to mines. Therefore investment costs will be low in terms of infrastructure and technology. Morover, abundant hydro and renewable energy is also available. The government is also actively supporting the battery industry with the motto 'From Mines to Mobility'.

POSCO Chemical further plans to build a battery core material supply chain in North America considering the growth prospects of the electric vehicles market globally.

The North American electric vehicle battery market is expected to grow at a CAGR of 58%, from 46 gigawatt hours (GWh) in CY'21 to 143 GWh in CY'23 and 286 GWh in CY'25. Cathode material accounts for 40% of the battery costs, and is a core material that is encouraged to be produced in the region due to tariff policies in North America.

General Motors has planned to have an electric vehicle production capacity of 1 million units per year in North America and 2 million units worldwide by CY'25. To this end, it is building four battery factories in North America through Ultium Cells, a joint venture with LG Energy Solutions. It plans to operate an electric vehicle plant in Ingersoll, Ontario, Canada this year, and is expanding its electric vehicle business in Korea.

With this establishment, POSCO Chemical has laid the foundation in global supply chain expansion and strong market leadership. The company further plans to increase the annual production capacity of cathode materials from 105,000 t in CY'22 to 280,000 t in CY25 and 420,000 t by CY'30 by promoting production bases for cathode materials in Korea, North America, China, and Europe.

"With the establishment of a joint plant in Canada, we will establish a battery material supply chain in North America and enter the market in earnest," said Min Kyung-joon, President, POSCO Chemical.

"With our business partners, GM is building a new, safer, and more sustainable electric vehicle ecosystem by leveraging the resources, technology and manufacturing expertise of our business partners in North America," said Doug Parks, GM's Vice President.

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