POSCO signs $733M Ultium graphite deal
To supply artificial graphite for batteries powering GM EVs Metal Tech News – January 4, 2023
Last updated 4/16/2023 at 6:56am
In a deal that will further support General Motors' electric vehicle ambitions, POSCO Chemical has entered into a contract to supply Ultium Cells LLC with $733 million (939.9 billion Korean won) of artificial graphite anode material over the next six years.
While natural, or mined, graphite makes up much of the anode material going in the lithium-ion batteries that power EVs, artificially produced graphite is added to increase charging speed and extend the life of the battery.
Traditionally, most artificial graphite has been produced in China. In 2021, however, POSCO began producing this lithium-ion battery anode material at its 8,000-ton-per-year plant in Pohang, South Korea.
POSCO has also been the only company in South Korea to produce natural graphite anode materials since 2011.
To increase its global competitiveness, the Korean company has built an entire artificial graphite value chain. This includes sourcing needle coke – an artificial graphite raw material produced from the high-temperature distillation of coal tar that is the byproduct of steelmaking – from its carbon materials subsidiary PMC Tech.
POSCO says the high-temperature processing provides the artificial graphite anode material with high stability and produces evenly spherical particles that allow for fast lithium-ion movement speed, which is advantageous for high-speed charging.
As a South Korean producer of low-cost and quality anode material, POSCO plans to strategically respond to regional supply chain strengthening policies such as the 2022 Inflation Reduction Act in the United States through partnerships with EV and lithium-ion battery manufacturers in North America and Europe.
"As the only anode material company in Korea, we have completed a complete value chain from raw materials to material production, and our business competitiveness through product portfolio expansion led to a result of contracts," said POSCO Chemical CEO Kyung-zoon Min.
POSCO has already built a strong partnership with Ultium Cells, a joint venture between GM and LG Energy Solution, to produce the batteries powering GM's e-mobility ambitions.
Last year, POSCO and GM entered into a partnership to develop a roughly $400 million plant in Quebec, Canada, to produce cathode active material for Ultium batteries. The South Korean chemical company also secured contracts last year to supply the American automaker with roughly $17 billion (21.8 trillion won) worth of lithium-ion battery cathode materials.
The company plans to continue the rapid expansion of its battery materials business.
"Based on our technology and competitiveness in raw materials, we will expand our global customers and develop our cathode and anode material business in a balanced manner to become a global top-tier battery material company," said Min.
This includes expanding its anode material production nearly fourfold – from the current 82,000 tons per year to 320,000 tons per year – by 2030.