The joint venture aims to invest approximately 1.21Tn Won (US$932.56M) between 2023 and 2026. 

The agreement will see the companies collaborating in a JV whereby GEM owns 49% or less, with EcoPro and SK On each holding 25.5% or above. The plant will be constructed in Saemangeum, South Korea and will have a minimum capacity of 43ktpy nickel-based precursor cathode active material (pCAM). Construction is touted to be completed by the end of 2024.

For GEM, the decision to add pCAM capacity to South Korea is a strategic one. The country is a free trade partner of the US and the plant would look to satisfy battery material sourcing requirements of the US inflation reduction act (IRA). Passed into law in August 2022, this legislation requires automotive companies to source 50% of the critical minerals used in EV batteries from North America or the USA’s allies by 2024, which will increase to 80% by the end of 2026.

The JV consortium already benefits from a secure upstream supply of nickel. GEM receives nickel intermediates from its QMB New Energy Materials plant in Indonesia, in which it owns a 63% stake. South Korean JV partner EcoPro also holds a 9% stake. The HPAL has an initial capacity of 30ktpy Ni-in-MHP, but additional phases will boost this to a little over 100ktpy by late 2024. Additionally, the consortium recently agreed to develop another HPAL plant in Sulawesi, Indonesia with a designed capacity of 30ktpy Ni-in-MHP.

SK On already has a presence in the USA, where it currently operates two battery factories in the state of Georgia and supplies Volkswagen (for US production of the ID.4) and Ford for the F-150 Lightning. Project Blue expects South Korean battery manufacturers to continue to make the most of their strategic advantage in the USA to claw back some of the global market share from their Chinese rivals.