Hyundai Motor Group unveiled plans to acquire a 5% interest in non-ferrous metal smelting company Korea Zinc in a deal worth approximately KRW527.2bn ($400m).

The stake will be acquired by the overseas joint venture (JV), dubbed HMG Global, established collaboratively by Hyundai Motor Group, Kia and Hyundai Mobis for a share price of nearly KRW504,333 ($380.99) per share.

Hyundai Motor Group’s announcement comes as a part of its collaboration with Korea Zinc on nickel value chain for electric vehicle (EV) business.

In this regard, both parties have forged a memorandum of understanding (MoU).

The South Korean automotive company and Korea Zinc have partnered to jointly source and process nickel raw material as well as to ensure a stable supply of processed nickel and battery materials.

The collaboration also includes exploring new businesses, such as battery recycling.

Besides, the companies will jointly buy nickel raw materials and invest in mine development projects to source raw materials that meet the Inflation Reduction Act (IRA) requirements.

Hyundai Motor Group and Korea Zinc aim to begin nickel supply in 2026. The automotive company said that it intends to source 50% of the nickel needed to produce EV batteries from the partnership by 2031.

It stated: ”The Group is actively seeking collaborations with various global partners specialising in the procurement and processing of raw materials and the manufacturing of battery materials.”

Headquartered in South Korea, Korea Zinc established a subsidiary for nickel sulphate production for EV batteries in 2017 by utilising its experience in smelting non-ferrous metals like zinc and silver.

The company seeks to expand its presence in the EV battery business by establishing a subsidiary to produce nickel for EV batteries.

Besides, Korea Zinc plans to build a nickel smelter in the Industrial Complex in Ulsan this year.