Posco Future M said Tuesday it will build a new lithium iron phosphate cathode (LFP) materials plant to supply batteries used in energy storage systems, targeting global ESS demand.
The South Korean battery materials arm of Posco Group said its board approved the investment plan on Monday to construct a dedicated LFP cathode plant in Pohang, North Gyeongsang Province.
Construction is set to start next year, with mass production expected in the second half of 2027. All LFP cathode materials produced at the new facility will be supplied for ESS applications, the company said.
The company said it plans to expand LFP cathode output to as much as 50,000 metric tons, starting with this investment.
To fund the construction, Posco Future M will make an additional investment in C&P Advanced Technology, a joint venture formed with China’s CNGR in 2023. Posco will invest about 123.6 billion won ($83.82 million) in the JV, equivalent to a 20 percent stake, according to a regulatory filing.
In August, Posco Future M signed a memorandum of understanding with CNGR and Fino, CNGR’s Korean subsidiary, to jointly expand cooperation in the LFP cathode materials project.
While LFP batteries have lower energy density compared to ternary batteries like nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA), they are favored for their affordability, durability and enhanced safety. LFP batteries are increasingly being adopted in ESS and entry-level electric vehicles, the company explained.
“Posco Future M currently focuses on producing cathode materials for NCM and NCA,” a company official said. “With the approval of the new LFP plant investment, we expect to further diversify cathode products and strengthen our competitiveness in securing orders in the global market.”
Amid surging ESS demand in North America, major battery manufacturers are converting their existing ternary battery facilities to LFP production lines to meet evolving market conditions.
Posco Future M said it also plans to convert part of its existing NCM cathode lines at its Pohang plant into LFP lines, with production expected to begin by the end of 2026.
sahn@heraldcorp.com
