SK Innovation and EcoPro have started discussions to form a joint venture in the US, TheElec has learned.
The venture will produce battery cathode materials and conduct battery recycling businesses, people familiar with the matter said.
How many shares of the venture each will have is yet to determined. But current discussions point to EcoPro controlling 80% of the shares and SK Innovation 20%.
EcoPro’s subsidiary EcoPro BM recently signed a contract worth 10 trillion won to supply SK Innovation with cathode from 2024 to 2026.
The pair are also discussing collaborating in battery recycling and the formation of the joint venture is also an extension of that, the people said.
Currently procuring cathode used in battery production in the US is difficult as securing supply of precursors and nickel sulfate is challenging.
But for EcoPro, SK Innovation is its biggest customer and having production facilities in the US allows it to cut distribution costs and delivery time.
The US venture will build the cathode factory around 2024.
Current discussions also have the venture focusing on reusing the scrub left from battery production. This is what EcoPro currently is looking to do with LG Energy Solution under their partnership.
Meanwhile, EcoPro runs a subsidiary called EcoPro EM, which is a joint venture with Samsung SDI that formed last year. EcoPro BM owns a 60% stake and Samsung SDI 40% stake in the venture.
Companies representatives confirmed the discussions for the venture but said it was in the early stages and nothing has been finalized.