Gwangyang: POSCO Future M Co., the battery materials unit of POSCO Holdings Inc., announced the completion of a crucial production facility aimed at establishing a fully integrated domestic supply chain for battery materials.

According to Ethiopian News Agency, the newly built precursor plant is located within the existing cathode materials complex in Gwangyang, approximately 290 kilometers south of Seoul. The facility boasts an annual output capacity of 45,000 tons, which is sufficient to supply batteries for around 500,000 electric vehicles, as stated by the company in a press release.

“In addition to building a nickel supply network across POSCO Group, the completion of this precursor plant allows us to complete a self-sufficient system covering raw materials, intermediate materials, and cathodes,” said Eom Gi-chen, the company’s President, in the release.

The facility is expected to enhance South Korea’s battery industry’s competitiveness amid ongoing global supply chain realignments. In the battery industry, a precursor refers to the intermediate material stage before it becomes cathode active material.

The company anticipates that the new plant will mitigate vulnerabilities arising from changing global trade policies. As of March, over 90 percent of Korea’s precursor imports originated from China. However, under the U.S. Inflation Reduction Act, batteries utilizing Chinese-made precursors are no longer eligible for tax credits due to the enforcement of Foreign Entity of Concern (FEOC) rules starting this year, as reported by market tracker SNE Research.