EcoPro, the world’s top nickel-rich cathodes manufacturer, said on Monday it has agreed with China’s GEM to cooperate on the overall cathode materials ecosystem, which includes raw battery mineral mines, smelting, precursors and cathodes.EcoPro BM Co., the group’s cathodes-producing unit, is set to build a consolidated production base in Indonesia through the partnership.“It is impossible to get over the current chasm without devastating innovation,” said Lee Dong-che, the founder and former chairman of EcoPro, referring to a slower-than-expected global EV uptake.“We agreed to pursue a project in Indonesia for an integrated system, which covers smelting, precursors and cathode materials, based on the strong trust established with GEM over the past decade.”EcoPro’s business is heavily affected by the prices and procurements of nickel, which makes up about 40% of costs for manufacturing cathodes.
The takeover is expected to allow EcoPro Materials to expand its business to the smelting and secure minerals eligible for US federal tax incentives on EVs, the group said.“EcoPro Materials are expected to improve competitiveness by covering all the smelting and precursor business,” Lee said.In March, EcoPro Co., the group’s holding company has already bought a 9% stake in the smelter for $11 million.Meanwhile, EcoPro Co.’s board of directors has recently agreed to appoint Lee as a standing advisor for the group to get over the recent slowdown in the battery sector and secure future growth drives.
The two companies are likely to form a joint venture in the country and establish a manufacturing facility around the smelter, industry sources in Seoul said.“They will be able to secure cost competitiveness to take on other Chinese rivals if they procure nickel from nearby mines and produce cathodes at a single plant,” said one of the sources.
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