South Korea’s LG Chem has earmarked ₩6 trillion ($5.2 billion) over the next four years to build out its battery materials business. The investment comes as automakers and state regulators set targets to transition away from internal combustion engine vehicles, in a shift that will likely be the most transformative to the mobility industry since the invention of the car.
The investments will focus on boosting the production of anode materials, separation membranes, cathode binders, and other essential battery components. This includes plans to build a massive cathode plant in the South Korean city of Gumi, that will increase the industrial giant’s anode production capacity by seven-fold, from 40,000 tons to around 260,000 tons by 2026. LG Chem had already agreed to invest ₩500 billion ($424 million) in the plant, which was announced in July 2019.
LG is also planning to expand its production capacity of carbon nanotubes (CNT), an advanced material used to enhance the performance of lithium-ion batteries, from 1,700 tons this year to triple or more by 2025. To get there, it’s planning on scaling output at its CNT Plant 2 and commencing construction on a third CNT plant this year.
On the supply chain front, LG said its preparing a joint venture with a mining company for the supply of metals and other raw materials for battery components. The company will “actively pursue cooperation in various ways with companies possessing mining, smelting and refining technologies to strengthen its metal sourcing competitiveness,” it said in a statement.
LG Chem is already one of the largest manufacturers of batteries and battery materials, with customers including Volkswagen, General Motors, and Tesla. And the company only sees the global battery materials market expanding – from ₩39 trillion ($34 billion) in 2021 to ₩100 trillion ($87 billion) by 2026.
Along with the battery investment, LG said it will pour an additional ₩3 trillion ($2.6 billion) into sustainable petrochemicals, like biodegradable polymers and plant-based bio-materials, and ₩1 trillion ($872 million) into its drug development business line.
CEO Hak Cheol Shin said the company is examining even more opportunities to shift toward an sustainable business portfolio. “This will be the most revolutionary change since the establishment of the company that will upgrade the value and sustainability of LG Chem, and tangible achievements will become available from the second half of this year,” he said.