Trafigura, a leading global commodity trader, has announced its investment in a South Korean electric vehicle (EV) battery raw materials manufacturer as part of its long-term growth strategy in the clean vehicle industry. Despite the recent slowdown in the sector, Trafigura recognizes the potential in the rising demand for clean energy solutions.
Korea Zinc Inc., the world’s top lead and zinc smelter, has signed a partnership agreement with Trafigura to jointly invest 185 billion won ($142.5 million) in a nickel smelter in South Korea. The smelter, built by Korea Energy Materials Co. (KEMCO), the nickel sulfate producing unit of Korea Zinc, will play a crucial role in the production of nickel for cathodes, one of the key materials for lithium-ion batteries used in electric vehicles.
Trafigura will invest 37 billion won to secure a 12.9% stake in KEMCO, while Korea Zinc will provide additional funding to increase its stake in the unit to 64%. In addition, Trafigura has signed a separate agreement to supply 20,000-40,000 tons of nickel to the smelter annually and secure 20% of the facility’s nickel sulfate output. This strategic investment ensures a stable supply of raw materials for EV batteries.
KEMCO’s all-in-one nickel smelter, with an annual capacity of 42,600 tons of nickel, is scheduled to begin operations in 2026. This will significantly increase KEMCO’s total output to 65,000 tons, making it the world’s largest nickel producer outside of China. With the enhanced production capacity, KEMCO will be able to support the manufacturing of approximately 1.6 million electric vehicles.
The investment in the nickel smelter aligns with Korea Zinc’s objective to strengthen its competitiveness in the nickel business and capitalize on the growing demand for EV batteries. The company aims to leverage its expertise in non-ferrous metal smelting acquired over the past 50 years to establish itself as a global leader in the battery materials industry.
Q: What is Trafigura investing in?
A: Trafigura is investing in a nickel smelter in South Korea for electric vehicle battery raw materials production.
Q: How much is Trafigura investing?
A: Trafigura is investing 37 billion won ($142.5 million) in the nickel smelter.
Q: What is the purpose of the investment?
A: The investment aims to secure a stable supply of nickel for cathodes, a key material for lithium-ion batteries used in electric vehicles.
Q: When will the nickel smelter start operations?
A: The nickel smelter is scheduled to begin operations in 2026.
Q: What is the expected output of the smelter?
A: The smelter will have an annual capacity of 42,600 tons of nickel, increasing KEMCO’s total output to 65,000 tons.
Q: What is Korea Zinc’s goal in the EV sector?
A: Korea Zinc aims to become a global leader in the battery material industry and capitalize on the growing demand for EV batteries.