The South Korean battery materials producer has landed a KRW40Tn (US$32.6Bn) supply contract with Samsung SDI for high-nickel NCA cathodes used in its Li-ion batteries.

POSCO Chemical (POSCO) has signed a 10-year contract with Samsung SDI to supply battery materials for use in its EV battery cells. The US$32.6Bn deal is reported to be the largest and longest-term order that the company has secured since it was founded. Further, it is the first business with Samsung SDI and means an expansion of POSCO’s customer base with much of its initial cathode supply contracts being signed with fellow Korean EV battery producer LG Energy Solution.

POSCO started its cathode business in 2012 and has since expanded in line with the rapid growth of the EV market. The company recently completed construction at its expanded Gwangyang cathode production facility in South Korea, which will ramp up production of high nickel cathode active materials for EVs and ESS applications. The expansion tripled the plant’s capacity to 90ktpy high-nickel cathode active materials which means the company’s overall cathode materials capacity currently stands at 105ktpy.

With ambitious plans to expand its cathode production capacity to 610ktpy by the end of the decade, POSCO has been diligent in securing its battery raw material supply chains. The company will secure lithium from its POSCO-Pilbara Lithium Solution JV and POSCO HY Clean Metal recycling facility. It will also soon produce nickel sulphate from its nickel processing plant in Gwangyang based on converted ferronickel and additionally owns a 30% stake in First Quantum Minerals’ Ravensthorpe nickel and cobalt operation in Australia.