Asia Tech Wire (July 26) -- South Korean battery maker LG Energy Solution (LGES) is looking to partner with Chinese companies to produce electric vehicle battery materials for Europe.
LGES confirmed Thursday that it is considering partnering with Chinese companies in three locations - Morocco, Finland and Indonesia - to produce lithium iron phosphate (LFP) cathode materials for the European market.
As for which three Chinese companies it is negotiating with, LGES said it was not yet in a position to respond.
Reuters was the first to report the news on Wednesday, but did not name the Chinese firms.
The cathode material for LFP batteries is lithium iron phosphate. In the first half of this year, China produced 989,000 tons of lithium iron phosphate, up 43.7% year-on-year, according to Chinese data provider ICCSINO.
Among the top three producers were Hunan Yuneng New Energy(301358.SZ), Shenzhen Dynanonic (300769.SZ) and Hubei Wanrun New Energy (688275.SH).
Each of the three companies responded Thursday to questions about whether they were in the talks with LGES.
A Yuneng staff member said there was no knowledge of the matter.
It was not clear whether the company was cooperating with LGES, a Dynanonic staff member said, adding that the company was currently in contact with leading domestic and foreign battery companies.
A Wanrun staff said that there is no news for the time being, and the company will make an announcement if there is relevant progress in the future.
In February, LGES signed a long-term supply contract for LFP cathode materials with Changzhou Liyuan New Energy Technology Co., a subsidiary of Chinese firm Jiangsu Lopal Tech (603906.SH).
Under the contract, Liyuan will supply about 160,000 tons of LFP cathode material products to LGES between 2024 and 2028, enough for the production of the batteries of 1 million EVs with a range of more than 400 kilometers.
In addition, the two sides will discuss the option of signing additional supply contracts, depending on market conditions.
Last September, LGES also signed a memorandum of understanding (MoU) with Liyuan, in which the two sides agreed to set up a new joint venture or utilize the latter's subsidiary, PT. LBM Energi Baru Indonesia, as a joint venture to operate a cathode material plant in Indonesia.
Regarding LGES's talks with three Chinese suppliers, a Lopal staff member said they didn't know much about the matter.
