By Kim Seung-yeon
SEOUL, March 23 (Yonhap) -- South Korean battery maker SK On Co. said Thursday it is forming a joint venture with two battery component partners to build a precursor manufacturing facility on the country's southwest coast.
SK On will sign an investment agreement with EcoPro Co. and China's Green Eco-Manufacture (GEM) on Friday, under which the three companies together will spend up to 1.21 trillion won (US$945 million) for what will be their second joint venture for battery materials, the battery maker under SK Group said.
They signed in November last year the first venture deal to build a facility in Indonesia to produce the mixed hydroxide precipitate (MHP), an intermediate nickel product for battery precursors.
The precursor plant will be located in Saemangeum, a reclaimed area on the country's southwest coast. It will aim to have an annual production capacity of 50,000 tons, equivalent to powering about 300,000 electric vehicles. The construction is set to be completed in 2024.
A precursor refers to a specific chemical form containing nickel, cobalt, manganese and aluminum before it is turned into cathodes, a key secondary battery material that determines the power and range of electric vehicle batteries.
Precursors account for 65-70 percent of the cost of cathodes.
The Indonesian venture will supply the Saemangeum plant with the MHP to be used as feedstock for precursors. It aims to produce MHP that contains 30,000 tons of high-purity nickel starting in 2024.
SK On has been bolstering efforts to strengthen the battery components supply chains amid the changing industry landscape. It signed in November last year a five-year contract with Chile's SQM for the supply of 57,000 tons of lithium.
SK On has also made an equity investment in an Australian miner, Lake Resources, and clinched a 10-year supply deal for 230,000 tons of lithium.
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