LG Chem has signed a memorandum of understanding (MoU) with China-based Huayou Group to build a lithium-phosphate-iron (LFP) cathode plant in Morocco.

Through the partnership, both companies aim to jointly enter the LFP cathode material market as well as bolster their cathode supply chain.

Under the MoU, LG Chem and Huayou Group will collaborate to develop a total of four facilities. This includes an LFP cathode material plant and a lithium conversion facility in Morocco.

The MoU also includes setting up a high-pressure acid leaching (HPAL) plant and a precursor plant with a production capacity of 50,000 tons per year in Indonesia.

Both companies will also explore the construction of a plant to extract mixed hydroxide precipitate (MHP) from nickel ore for precursor production.

The LFP cathode material plant will be built by LG Chem and Huayou Group’s subsidiary Youshan. It will have an annual capacity of 50,000 metric tons and is scheduled to commence mass production by 2026.

Besides, the Moroccan plant is expected to address the raising demand for LFP cathode materials, which is said to cost lesser than nickel-cobalt-manganese (NCM) cathodes.

LG Chem CEO Shin Hak-cheol said: “We will actively respond to the emerging LFP cathode material market with the Morocco plant as our global base.

“Our goal is to create a strong, vertically integrated material supply chain — flowing from raw materials to precursors and cathode materials — and solidify our status as the world’s top comprehensive battery materials producer.”

The LFP cathode materials produced at the facility in Morocco will be supplied to the North American market.

LG Chem aims to enter the LFP cathode materials business based on the Morocco plant and expand the business into lithium-manganese-phosphate-iron (LMFP) cathode materials.

LMFP is a mixture of manganese and LFP which could offer more capacity and better output compared to LFP cathode materials.

LG Chem said that the proposed conversion plant in Morocco will extract lithium hydroxides and lithium carbonates. It is estimated to mass-produce 52,000 tons of lithium per year by 2025 and deliver it to the LFP plant.

Furthermore, LG Chem and Huayou Group’s unit Huayou Cobalt will join forces for the vertical integration of the cathode materials supply chain. This will range from HPAL to production of precursor to meet the standards of the US Inflation Reduction Act (IRA).