Battery material production undergoes domestic expansion by LS Group
The South Korean conglomerate, LS Group, is making significant strides in the global battery materials market. In a bid to secure a stable raw material supply and localize production, the company is expanding its operations in nickel sulfate, a core material for precursors, and partnering with Indonesian nickel industry players.
One of LS Group's joint ventures, LLBS, specializing in high-nickel cathode materials, will supply nickel sulfate to the same venture for precursor production. This move is part of a larger plan to reduce the reliance on imported precursors, as currently, around 90 percent of precursors are sourced from China.
In line with this strategy, LS Group is pursuing partnerships with nickel smelters and mines in Indonesia, the world's largest nickel holder. This strategic move is expected to accelerate the decoupling of secondary battery materials from China, a trend that is gaining momentum due to the exclusion of batteries containing more than 60 percent of materials produced by prohibited foreign entities (PFEs), including China, from the Advanced Manufacturing Production Credit (AMPC) starting from 2026.
The U.S., too, is taking steps to reduce its reliance on Chinese materials for secondary battery materials. Measures such as the Inflation Reduction Act (IRA) and the One Big Beautiful Bill Act (OBBBA) aim to tighten restrictions on Chinese battery inputs. This growing global trend positions Korea, the only country outside China with large-scale cathode production capacity, to benefit from rising U.S. demand for secondary battery materials.
On the domestic front, LS-L&F Battery Solution (LLBS) is set to complete a new precursor plant in Saemangeum, North Jeolla Province, in September 2025. The plant, with an annual capacity of about 40,000 tons of precursors, will complement Lotte Chemical's existing precursor material factory in the same location, which opened in September 2021 with an annual capacity of 10,000 tons.
Meanwhile, LS MnM Inc., a non-ferrous smelting affiliate of LS Group, is building a large-scale electric vehicle battery material (EVBM) plant in Onsan on South Korea's east coast. With a 670 billion won investment, the plant will have an annual capacity of about 20,000 tons.
The secondary battery materials business is expected to show long-term upward growth despite various issues and variables. As the world transitions towards a more sustainable energy future, the demand for lithium-ion batteries, the primary power source for electric vehicles and renewable energy storage, is projected to increase significantly. Precursors, intermediate materials needed to produce cathode materials, a key component of lithium-ion batteries, are thus expected to play a crucial role in this growth.
With these strategic partnerships and investments, LS Group aims to secure a stable raw material supply and contribute to the localization of battery materials, positioning itself at the forefront of the global battery materials market.
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