LG Chem, one of the world’s leading battery manufacturers, has announced plans to increase electric vehicle (EV) battery production capacity in Indonesia and Morocco. The company has partnered with Huayou Group, a Chinese cobalt producer, to build a joint plant for lithium iron phosphate (LFP) cathode materials in Morocco and also plans to invest in a lithium conversion and precursor plant in Indonesia.
LG and Huayou Will Produce LFP Cathode Materials in Morocco
According to a statement from LG Chem on Friday, the company has signed a memorandum of understanding (MoU) with Huayou Group subsidiary Youshan to establish a joint venture to produce LFP cathode materials in Morocco. The plant will have an annual production capacity of 50,000 tons of LFP cathode material, which is enough to provide batteries for 500,000 EVs.
LFP cathode materials are cheaper and safer than nickel-based cathode materials, such as nickel cobalt manganese (NCM) or nickel cobalt aluminum (NCA), which are widely used by LG Chem and other battery manufacturers. LFP cathode materials are also better suited for low- and mid-range EVs, which are expected to increase in demand as more consumers seek affordable and environmentally friendly mobility options.
LG Chem stated that LFP cathode materials produced in Morocco will be supplied to the North American market, and that the joint venture will benefit from a free trade agreement between Morocco and the United States. The company also said it would adjust the joint venture’s equity ratio in line with U.S. Treasury Department guidelines.
Construction of the LFP cathode materials plant in Morocco is expected to begin in 2024 and be completed in 2026.
LG to Invest in Lithium Conversion and Precursor Plant in Indonesia
In addition to the LFP cathode materials plant in Morocco, LG Chem also plans to invest in a lithium conversion and precursor plant in Indonesia, a region rich in nickel resources. Nickel is a critical component for making NCM or NCA cathode materials, which offer higher energy density and driving range than LFP cathode materials.
LG Chem announced that it will build a lithium conversion plant in Morocco, which will produce 52,000 tons of lithium hydroxide per year starting in 2025. This lithium hydroxide will be used to manufacture precursors, which are raw materials for cathode materials.
The company also stated that it will construct a precursor plant in Indonesia, producing 50,000 tons of precursor per year starting in 2024. These precursors will be used to manufacture NCM or NCA cathode materials for high-end EVs.
LG Chem emphasized that the lithium conversion and precursor plants in Indonesia will help secure a stable supply of raw materials and reduce the cost and environmental impact of battery production.
LG Aims to Strengthen Its Position as a Global Battery Leader
LG Chem is one of the world’s largest battery manufacturers, supplying batteries to major automotive manufacturers such as Tesla, Volkswagen, Hyundai, and General Motors. The company aims to increase its annual battery production capacity from 120 GWh in 2020 to 260 GWh in 2023 and 500 GWh in 2025.
The company’s expansion plans in Indonesia and Morocco are part of its strategy to diversify its product portfolio and geographic presence, and to meet the growing demand for EV batteries in various markets. LG Chem stated that it will continue to invest in research and development (R&D) and innovation to develop advanced and competitive battery technology.
By establishing battery factories in Indonesia and Morocco, LG Chem hopes to solidify its position as a global battery leader and contribute to the green transformation of the mobility industry.
Image source >>> BPMI Setpres/ARAHKATA