Posco Future M to raise W1.1tr for battery expansion
Posco Future M, a battery materials unit affiliated with steelmaking giant Posco Group, announced Tuesday that its board of directors has approved a rights offering to raise 1.1 trillion won ($771 million), aiming to expand its production base in preparation for anticipated growth in electric vehicle battery demand.
According to the company's filing, Posco Future M plans to issue 11,483,000 new shares in July. The funds raised from the new share issuance will be allocated to key areas: 181 billion won for facility investment, 288.3 billion won for operational costs, and 630.7 billion won for acquiring securities of other companies.
The capital will be used to enhance and expand production capacity in both Korea and North America, with all funds planned to be utilized by 2026, the company said.
Notably, 353.4 billion won, categorized under the securities acquisition budget, will be invested in Ultium CAM, Posco Future M's 85:15 joint venture with General Motors in Quebec City.
The joint venture's cathode materials plant is currently under construction, with phased completion starting in May and full-scale operation scheduled to begin in 2026.
On April 29, Posco Group Chair Chang In-hwa visited the Ultium CAM plant construction site to check on its progress, the group said.
'In this rapidly changing global environment, I request that you remain focused on managing the construction schedule and creating the optimal conditions for a smooth start to operations,' Chang said, speaking to officials at the construction site.
'We expect this plant will serve as a foothold for our expansion into the North American market once the battery materials sector regains momentum.'
The company added that the remaining funds will be used to acquire a domestic facility for spherical graphite production, a key anode material; expand manufacturing facilities for high-nickel nickel-cobalt-aluminum oxide, a cathode material known for its high energy density, at its Gwangyang plant in Gwangyang, South Jeolla Province; maintain and upgrade existing facilities; and procure raw materials for its precursor plant in Gwangyang.
Posco Future M's largest shareholder, Posco Holdings, also announced its participation in the rights offering. The company will invest 525.6 billion won to purchase the full allocation of newly issued shares corresponding to its 59.7 percent stake in Posco Future M.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
4 days ago
- Korea Herald
Govt. convenes emergency meeting on response to planned hike in US steel tariffs
The government held an emergency meeting with major local steelmakers Monday to discuss the impact of the United States' plan to double its tariffs on all steel imports to 50 percent later this week, the industry ministry said. The meeting, hosted by the Ministry of Trade, Industry and Energy, was attended by officials from POSCO Group, Hyundai Steel Co. and other major steel companies here, according to ministry officials. Monday's meeting came after US President Donald Trump said last week he will double tariffs on foreign imports of steel to 50 percent Wednesday. The ministry said steel industry officials asked the government to swiftly share information on US tariff measures and continue cooperation with the private sector to respond to them. The ministry added that the government will work to minimize any negative impact of US tariffs on the local industry through trade negotiations with Washington. In May, South Korea's steel exports went down 12.4 percent from a year earlier to $2.6 billion, with shipments to the US plunging 20.6 percent over the cited period. Korean steelmakers have been working to soften the blow of Trump tariffs, with some companies planning to increase their production in the US. Hyundai Steel plans to invest $5.8 billion to construct an electric arc furnace-based steel mill in Louisiana by 2029, its first overseas production facility, according to company officials. (Yonhap)
Korea Herald
5 days ago
- Korea Herald
Trump plans 50% tariffs on steel and aluminum
WEST MIFFLIN, Pennsylvania (Reuters) — US President Donald Trump said he planned to increase tariffs on imported steel and aluminum to 50 percent from 25 percent, ratcheting up pressure on global steel producers and deepening his trade war. "We are going to be imposing a 25 percent increase. We're going to bring it from 25 percent to 50 percent — the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States," he said at a rally in Pennsylvania. The doubling of steel and aluminum levies intensifies Trump's global trade war and came just hours after he accused China of violating an agreement with the US to mutually roll back tariffs and trade restrictions for critical minerals. Trump announced the higher tariffs just outside Pittsburgh, where he was talking up an agreement between Nippon Steel and US Steel. Trump said the $14.9 billion deal, like the tariff increase, will help keep jobs for steel workers in the US. He later posted on social media that the increased tariff would also apply to aluminum products and that it would take effect Wednesday. Shares of steelmaker Cleveland-Cliffs surged 26 percent after the market close as investors bet the new levies will help its profits. The announcement drew harsh reactions from US trading partners around the world. Canada's Chamber of Commerce quickly denounced the tariff hike as "antithetical to North American economic security." "Unwinding the efficient, competitive and reliable cross-border supply chains like we have in steel and aluminum comes at a great cost to both countries," Candace Laing, president of the chamber, said in a statement. Canada's United Steelworkers union called the move a direct attack on Canadian industries and workers. The European Commission said Saturday that Europe was prepared to retaliate. "This decision adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic," a European Commission spokesperson said. "The EU is prepared to impose countermeasures, including in response to the latest US tariff increase." Australia's center-left government also condemned the tariff increase, with Trade Minister Don Farrell calling it "unjustified and not the act of a friend." Trump spoke at US Steel's Mon Valley Works, a steel plant that symbolizes both the one-time strength and the decline of US manufacturing power as the Rust Belt's steel plants and factories lost business to international rivals. Closely contested Pennsylvania is also a major prize in presidential elections. The US is the world's largest steel importer, excluding the European Union, with a total of 26.2 million tons of imported steel in 2024, according to the Department of Commerce. As a result, the new tariffs will likely increase steel prices across the board, hitting industry and consumers alike. Steel and aluminum tariffs were among the earliest put into effect by Trump when he returned to office in January. The tariffs of 25 percent on most steel and aluminum imported to the US went into effect in March, and he had briefly threatened a 50 percent levy on Canadian steel but ultimately backed off. Under the so-called Section 232 national security authority, the import taxes include both raw metals and derivative products as diverse as stainless steel sinks, gas ranges, air conditioner evaporator coils, horseshoes, aluminum frying pans and steel door hinges. The 2024 import value for the 289 product categories came to $147.3 billion with nearly two-thirds aluminum and one-third steel, according to Census Bureau data retrieved through the US International Trade Commission's Data Web system. By contrast, Trump's first two rounds of punitive tariffs on Chinese industrial goods in 2018 during his first term totaled $50 billion in annual import value.
Korea Herald
5 days ago
- Korea Herald
LG Energy Solution begins LFP battery production for ESS in US
Korean battery maker turns to rising ESS demand amid EV slump LG Energy Solution has begun the mass production of lithium iron phosphate, or LFP, batteries for energy storage systems, or ESS, at its manufacturing plant in Holland, Michigan, the Korean battery maker said Sunday. According to LG Energy Solution, the rollout strengthens the company's local production capabilities in North America to enable the stable supply of batteries to major clients and swift responses, while avoiding the impact of US tariffs and securing more favorable cost competitiveness. LG Energy Solution has also become the sole battery manufacturer currently mass-producing ESS-bound LFP batteries. The Korean battery maker said the products being made at the US facility are long cell-based pouch-type models, which feature superior energy efficiency and safety at competitive prices. LG Energy Solution Vertech, a US-based ESS system integrator fully owned by LG Energy Solution, has signed deals to supply the ESS LFP batteries to several customers, including Terra-Gen and Delta Electronics. LG Energy Solution emphasized that the mass production of LFP batteries for ESS marks a major milestone in the firm's strategic rebalancing efforts. The Korean battery maker has been actively pushing for rebalancing to increase the efficiency of its investments and cut down on unnecessary costs as external business uncertainties grow due to a temporary slowdown in the global EV market and political changes, such as tariffs, in key countries. LG Energy Solution originally planned to begin mass production of ESS-bound LFP batteries at a new plant in Arizona in 2026. However, the company decided to accelerate the production roadmap by shifting the EV battery production lines at the Holland site into ESS production lines and optimizing related facilities. Based on local production capacity, the battery maker plans to respond quickly to the soaring demand for ESS products in various industries such as AI-related data centers and eco-friendly energy. According to market analysis by SNE Research, the global lithium-ion battery ESS market is projected to reach 618 gigawatt-hours in 2035, up from 185 GWh in 2023, with a compound annual growth rate of 10.6 percent. The market size is expected to hit $80 billion by 2035. Earlier this year, LG Energy Solution also forecast that electricity consumption will continue to increase with more data centers being built to cope with the growing application of AI technology. Meanwhile, the proportion of new and renewable energy will expand greatly, resulting in more than a fivefold growth in ESS demand over the next 10 years. 'We are currently engaging in talks with various clients in the North American region about supplying ESS batteries,' said an LG Energy Solution official. 'We will continue to deliver value to customers based on our top-class technology and quick responses in local markets.'
