Easpring said today it has signed a strategic cooperation agreement with SK, which will invest to acquire no more than a 30pc stake in Easpring's European CAM joint venture with Finnish Minerals (FMG) and its wholly-owned subsidiary Finnish Battery Chemicals (FBC).
The joint venture will be in charge of the construction and operation of Easpring's European new material production base. It will build the first phase of the project, with 100,000 t/yr of capacity for lithium nickel cobalt manganese oxide (NCM) with high nickel content, in two stages. It will invest €500mn ($579mn) to build the first stage, comprising 50,000 t/yr, which is scheduled to be completed and put into operation in 2024.
Easpring and SK have also agreed to establish a joint venture in South Korea to develop a lithium-ion CAM business, with the former intending to hold no more than a 49pc stake and the latter no less than 51pc. The two firms also plan to set up a venture in China if necessary, with Easpring holding no less than 51pc and SK no more than 49pc.
Both parties have also agreed to form a wholly-owned subsidiary in the US directly or indirectly through their South Korean JV to expand their business in the US market. They have also announced their intention to jointly develop a lithium iron phosphate business.
SK and its subsidiaries are long-term partners of Easpring, whose sales to SK and its subsidiaries rose from 16.1mn yuan ($2.5mn) to Yn162.1mn and Yn834mn during 2018-20, accounting for 0.49pc, 7.1pc and 26.2pc of the company's operating revenues. SK is one of the main power battery producers globally and supplies to major automakers such as Volkswagen, Ford, Daimler, Hyundai and Kia.
The NEV industry is under trade protection in various economies and by local authorities as it is a strategic emerging industry. Global lithium battery production capacity is expected to soar by 264pc to 222GWh in 2025 from 61GWh in 2020, with volumes in Europe forecast to surge by 839pc from 49GWh in 2020 to 460GWh in 2025, Easpring said at the 2021 Nickel and Cobalt Annual Conference held in Ningbo, Zhejiang province from 1-4 November.
China exported 50,198t of NCM material in the first nine months of this year, up by 88pc from a year earlier, with the average export price rising by 14pc from a year ago to $23/kg, according to China's customs data.
Major battery manufacturers LG Chem, Samsung, SKI and CATL have been expanding their capacities by building lithium-ion battery production plants in Poland, Hungary and Germany in recent years, boosting sales of Chinese NCM to the EU. China used to export most of its NCM to Asian countries, including South Korea and Japan, before 2018.
Easpring is the first Chinese CAM manufacturer that will establish an NCM business in Europe. Its partnership with FMG and FBC will help it integrate into the European EV industry chain and expand its market share in Europe, according to the company.
NCM and lithium cobalt oxide are Easpring's main products. The firm has established partnerships with SKI, LGC, Samsung SDI and Northvolt, among others, with a large part of its production exported to Europe, the US, Japan and South Korea. It produced 24,699t of CAM in 2020, with its output expected to double this year.