POSCO FUTURE M announced on the 10th that it held a ceremony for the completion of its precursor factory in the Yulchon industrial complex in Gwangyang, Jeollanam-do. A precursor refers to a substance that is the stage before becoming cathode material. The precursor consists of nickel (Ni), cobalt (Co), and manganese (Mn), and is sent to the cathode factory to combine with lithium (Li) to become cathode material.
The POSCO FUTURE M Gwangyang precursor factory was established on a total area of 22,400 square meters (about 6,800 pyeong) within the existing Gwangyang cathode materials factory site. It has the capacity to produce 45,000 tons of precursors annually, enough to manufacture batteries for 500,000 electric vehicles. The precursors produced here will be used entirely for the manufacturing of cathode materials by Ultium Cells.
POSCO FUTURE M explained that through precursor self-sufficiency, it has strengthened its supply chain competitiveness amid global policy changes. According to energy market research firm SNE Research, as of March this year, Korea's reliance on imports of precursors from China exceeds 90%. Using Chinese precursors means that from this year, batteries sold in the U.S. market will be subject to foreign entity (FEOC) regulations and will not qualify for tax credits under the Inflation Reduction Act (IRA).
POSCO FUTURE M has further increased its supply chain competitiveness by acquiring nickel, a core raw material for precursors, from the POSCO Group. POSCO produces high-purity nickel sulfate based on non-Chinese nickel processed raw materials and supplies it to the POSCO FUTURE M precursor factory. Additionally, POSCO HY Clean Metal supplies nickel sulfate recovered through recycling to POSCO FUTURE M.
Um Ki-chun, CEO of POSCO FUTURE M, said, "Following the establishment of a nickel supply chain at the POSCO Group level, this completion of the precursor factory has completed a self-sufficiency system ranging from 'raw materials, semi-finished products, to cathode materials.' He noted that amid global supply chain policy changes, the Gwangyang precursor factory will contribute to strengthening and growing Korea's battery industry competitiveness.