Will LG Chem’s soon-to-be-built massive cathode plant in US ease Korean firm’s IRA woes?

Posted on : 2023-12-21 17:14 KST Modified on : 2023-12-21 17:14 KST
The chemical company has broken ground in Tennessee, saying it intends to establish a production hub for battery materials
LG Chem CEO Shin Hak-cheol (fifth from left) and Tennessee Gov. Bill Lee (sixth from left) and other key figures take part in a groundbreaking ceremony for LG Chem’s new cathode plant in Tennessee, USA, on Dec. 19 (local time). (courtesy of LG Chem)
LG Chem CEO Shin Hak-cheol (fifth from left) and Tennessee Gov. Bill Lee (sixth from left) and other key figures take part in a groundbreaking ceremony for LG Chem’s new cathode plant in Tennessee, USA, on Dec. 19 (local time). (courtesy of LG Chem)

LG Chem has begun construction on what it says will be the biggest cathode plant in the US.

The Korean chemical company announced that it held a groundbreaking ceremony for a cathode plant in Clarksville, Tennessee. The firm will initially invest approximately 2 trillion won (US$1.6 billion) to build a cathode plant capable of producing 60,000 metric tons of materials annually on a 1.7-million-square-meter (420-acre) site in Clarksville.

The goal of the Tennessee plant is to have a production capacity to make cathodes for about 600,000 high-performance electric vehicles (capable of traveling 500 kilometers) each year. When completed, it will be the largest cathode plant in the US to date. Cathodes are one of the key elements that go into batteries.

The Tennessee plant will begin full-scale production of NCMA (nickel, cobalt, manganese, aluminum) cathode materials in 2026, with LG Chem planning to diversify its product portfolio with next-generation cathode products in the future.

The scale of production will be determined based on the trend of increasing demand. LG Chem has previously signed a comprehensive agreement with General Motors for the long-term supply of 950,000 tons of cathode materials in 2022 and a North American cathode supply contract with Toyota worth 2.9 trillion won in October.

With the Tennessee plant, LG Chem will actively work to help customers meet the requirements of the US Inflation Reduction Act for electric vehicle subsidies. The Tennessee plant is dedicated to North American customers, located in the middle of the US providing geographic accessibility for deliveries and raw material imports.

In a press release, LG Chem said that its new plant would “secure a reliable supply chain for minerals and precursors from nations with US free trade agreements.” It specified that it would utilize precursors from Ulsan by Korea Precursor Company, a joint venture of LG Chem and Korea Zinc.

“LG Chem will enhance the manufacturing competitiveness of the Tennessee plant by advancing its engineering technology of the calcination process, securing the world's highest-level annual production capacity of 10,000 tons per line,” the company said.

The chemical company also plans to apply smart factory technology to the Tennessee plant to automate the production process and establish a quality analysis and control system. In addition, the company will discuss material supply chain cooperation with waste battery recyclers in the US. and work with local power suppliers to run the plant using 100 percent renewable energy such as solar and hydropower.

By Choi Woo-ri, staff reporter

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