LG Chem Secures More Materials For Future Battery Production

AUG 22 2018 BY VANJA KLJAIC 19

The South Korean company will increase cell manufacturing capacity to 90 GWh in 2020 from a previous forecast of 70 GWh

The battery business is set to become one of the foundations for the automotive industry in the forthcoming years. With so many new plug-in hybrid and fully electric vehicles slated to hit the market, batteries are becoming the hottest commodity in the car world. One of the biggest companies in the industry – the South Korean lithium-ion battery (LIB) cell manufacturer LG Chem – are expanding their capacities to ensure they can satisfy future demand.

The company announced that it will increase cell manufacturing capacity to 90 GWh in 2020. This marks an increase from a previously forecasted level of 70 GWh. If LG Chem uses 100% of its output to produce the NMC532, the forecasted 90 GWh would require around 100kt of cathode. This would need to contain 40kt nickel, 22kt cobalt, 16kt manganese and 50kt lithium (carbonate equivalent), and 90kt of anode materials. And these could be 100% graphite, according to a conclusion made by the metals and minerals market research company Roskill.

Additionally, if LB Chem was producing at full capacity, the Lithium Ion Battery output would equate to raw material consumption greater than the entire LIB market in 2015.

In order to secure a steady flow of raw materials, LG Chem signed a joint venture with Zhejiang Huayou Cobalt. This will ensure an establishment of precursor and cathode material facilities, providing a capacity of 40,000tpy that may be expanded to 100,000tpy – if needed. As a cobalt refiner with cobalt mining and processing assets in the DRC, the Chinese company makes for a perfect partner to help achieve the high yearly LIB output envisioned by the South Korean battery giant.

Furthermore, last month, LG Chem signed a 5-year, 7,000tpy lithium hydroxide off-take with Nemaska Lithium. Not even a week ago, the company also announced an agreement with Ganfeng Lithium starting 2019 that will provide them with a 16,000tpy lithium hydroxide supply.

Another investment made by LG Chem is with a Korean anode producer GS E&C. Additionally, the company has a  10% stake in LS Nikko’s nickel sulphate plant. Thanks to its parent company investments, LG Chem is also an investor in Cobalt Blue’s Thackaringa primary cobalt project in Australia.  Moreover, the company had previously been linked with Pilbara Minerals for a downstream conversion facility as well. All of these mark hefty and future-proof moves by one of the biggest battery producers in the world.

According to Roskill, LG Chem is just one of the few LIB producers that have publicly revealed their information on its LIB supply chain raw material supply and strategy. With the sheer volume of raw materials being locked-in by LG Chem proves that activity in the sector continues at a rapid pace, Roskill said.

Source: Green Car Congress

Categories: Battery Tech

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19 Comments on "LG Chem Secures More Materials For Future Battery Production"

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Viking79

So LG upped their 2020 production forecast by the current production of the Tesla/Panasonic gigafactory? As I have said for a long time, if companies place orders it only takes 2 or 3 years to have production. The issue is not so much the batteries, but the manufacturers (GM et al.) reluctance to commit to production of electric cars. This production increase is a sign of orders coming in, manufacturers are starting to commit.

theflew

Do you think LG Chem is making these commitments on the hope someone is going to buy their batteries? Given GM has been using LG Chem batteries since the beginning of the Volt I would have to imagine they are first in line.

Pushmi-Pullyu

“Do you think LG Chem is making these commitments on the hope someone is going to buy their batteries?”

Hope? No, not merely hope. Think? Well maybe, but I’m fairly certain.

I submit the evidence is quite clear that LG Chem, and other major battery suppliers, are not committing to building out more production capacity until they have actual signed contracts in hand for future deliveries. The uptick in LG’s announced goals is, I’m fairly sure, just a reflection of its growing list of orders for future production.

The reluctance of major battery suppliers to build out production based on speculative demand is understandable. LG Chem, unlike far too many EV enthusiasts, has not forgotten that it was only a few years ago that a glut on the international market for li-ion batteries drove down prices so low that Envia went bankrupt and A123 nearly did too. During that period, Panasonic mothballed some of its factories. (Did LG Chem also? I dunno.) A glut due to an anticipated surge in production of EVs which did not appear.

mzs.112000

Although that EV surge did not happen then, I fully believe it will happen soon.
There are so many new models coming out soon, that for full production, LG will need at least another 20GWh/year to supply enough batteries. Hyundai and Kia are using LG Chem cells, Nissan is switching from AESC to LG Chem, Chevy has used LG Chem since 2013 and they are anticipating higher Bolt EV production soon.

Seven Electrics
Viking79

Their original plans for 2020 were for 70 GWh and the new plans are for 90 GWh, the difference is the current 20 GWh rate of GF1. This represents a change of plans, or probably a new order(s) for on the order of 15,000 cars a month (current Model 3 rate).

David Green

This is great news for EV in general, I wonder who ordered all the new battery production?

Dav8or

My guess is, a little bit of everybody except probably Tesla. I also bet a certain amount of this increased capacity is speculative. They may not have all the orders in hand to cover all this, but they may feel confident they will soon.

Doggydogworld

20 GWh/year is enough for 20k BEVs per month assuming ~80 kWh batteries. It’d be closer to 25k new ~60 kWh Leafs, Konas, etc. per month.

David Green

Thinking about the, the increased demand, Hyundai and Nissan for sure… GM must be in there somewhere, along with the European makers.

eject

See. You plan to produce a car. That is going to take 3-4years from drawing board to release. If you order the batteries about half way into the process you will get them delivered.
No battery problem.

theflew

Agreed. I see this as proof there are many EV’s on the way. LG Chem isn’t signing contracts for materials just for the fun of it.

silversod

It’s really unbelievable just how deep the big guys have their heads in the sand regarding the change from ICE’s to BEV’s.

HVACman

90 GWh/year is good for 1.5 million 60-kW packs per year. Add this count to what Panasonic, Samsung, etc. will also be making and the current global trickle of affordable BEVs will become a flood.

David Green

Wow, LG is accelerating… 90GWH is massive, and 2020 is only 16 months away….

Doggydogworld

Panasonic, CATL and even BYD have been leaving LG (and Samsung) in the dust. This gets LG back in the game in a big way.

David Green

I do not think any maker is doing 90GWh annually, it looks like LG may take the lead in 2020?