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LG lithium plant in Morocco to start production in 2026

LG's plant aims to produce 50,000 metric tonnes of lithium-phosphate-iron cathode materials annually, enough to be installed in 500,000 entry-class EVs Unsplash.com
LG's plant aims to produce 50,000 metric tonnes of lithium-phosphate-iron cathode materials annually, enough to be installed in 500,000 entry-class EVs

South Korea’s LG Chem Ltd has entered into partnership with China’s Huayou Group’s subsidiary Youshan to build a joint electric vehicle (EV) battery material plant in Morocco in an effort to diversify its portfolio.

The plant, set to start production in 2026, aims to produce 50,000 metric tonnes of lithium-phosphate-iron (LFP) cathode materials annually, enough to be installed in 500,000 entry-class EVs, the South Korean chemical maker said in a statement.

LG Chem, known for manufacturing more expensive nickel-cobalt-manganese cathodes, is entering the LFP cathode business for the first time to meet growing demand for cheaper LFP batteries.

The auto industry is stepping up efforts to produce more affordable EVs, whose most expensive components are the batteries.

LG Chem said LFP cathodes produced at the Morocco plant will be supplied to the North American market and receive subsidies from the US Inflation Reduction Act (IRA) as Morocco is a free-trade partner with the US.

The IRA is designed to wean the US off the Chinese supply chain for EVs. It requires at least 40 percent of the value of critical minerals used in an auto battery to be sourced from the US or a free trade partner to qualify for a $3,750 tax credit per vehicle. South Korea has a free-trade agreement with the US.

LG Chem and Youshan would need to adjust their respective equity share in compliance with the US treasury department’s guideline of a “foreign entity of concern”, a provision aimed at China, LG Chem said in the statement.

The US treasury department has not yet provided a precise definition of “foreign entity of concern” and how it would be applied.

LG Chem also announced an additional investment plan with Huayou Cobalt to build a lithium conversion plant in Morocco, aiming to start mass production by 2025 with an annual capacity of 52,000 tonnes of lithium.

Furthermore, LG Chem said it plans to build two facilities in Indonesia – a precursor plant with an annual production capacity of 50,000 tonnes and a plant to extract mixed hydroxide from nickel ore for precursor production.

The size of LG Chem’s investments for its four facilities with Huayou Group has not been finalised yet.