Batteries: Umicore to supply 125kt of high-nickel cathode materials to LG Chem

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LG Chem has signed a multi-year supply agreement with cathode producer Umicore to buy 125kt of high-performance NCM cathode materials to meet growing EV demand. The agreement will also include a technology licensing arrangement covering IP rights and the recycling of its production scrap. In addition, the companies are currently discussing the terms of a long-term cooperation in battery recycling.

In 2020, Umicore’s cathode plants in Korea and China will begin supplying material to LG Chem’s Asian battery cell operations. The largest part of the company’s cathode material, however, will be supplied by Umicore’s new facility in Poland, starting in 2021. This facility will feed LG Chem’s cell plants in Kobierzyce, Poland. The new plant is part of a €660M (US$720M) investment into additional cathode production.

In the same week, Tesla announced a battery supply agreement with LG Chem for its Shanghai Model 3 factory. While Tesla initially planned to produce its NCA lithium-ion cells in-house, LG Chem has convinced the North American automaker to adopt its NCM 811.

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Umicore’s official press release establishes an agreement covering “125,000 metric tonnes to be delivered over several years”. This means that LG Chem’s annual future demand for cathode materials won’t be met in full by the recent agreement. Roskill estimates that by 2025, LG Chem’s global plants could require an approximate 180ktpy of nickel-based cathode materials. In Poland, LG Chem plants could require around 20ktpy of high-nickel cathode material by the same year.

Part of the cathode produced in Poland by Umicore will possibly be supplied to the first wave of Volkswagen’s ID line-up. Similarly, it is also expected that part of that cathode material produced by Umicore in China will be ultimately assembled into the Chinese Tesla Model 3’s NCM 811 cylindrical cells. While LG Chem has started using this chemistry in buses, Tesla is going to be its first client using NCM 811 in passenger cars on a large scale. However, LG Chem is not targeting NCM 811 as its definitive future chemistry.

In a recent interview with Korean media, LG Chem’s CFO Chung Ho-Young stated that the company is expected to transition from its mass-market NCM 622 pouch type to NCM 712 in the next 2-3 years. NCMA is the medium and long-term goal, however, with almost 90% nickel content and less than 10% cobalt.

The reason for this is that several research studies suggest that manganese is less effective than aluminium in suppressing the cathode active mass dissolution and the parasitic electrolyte oxidation process occurring in high-nickel content batteries. These two processes ultimately reduce cell capacity and cycle life. Instead, a combination of both manganese and aluminium in high-nickel cathodes has proven to double cycle life when compared to manganese alone. In this sense, LG Chem is probably targeting NCMA as its future flagship chemistry.

While it may seem irrelevant for the reader, Umicore also stated that “it will be the first company to supply cathode materials to its global customers with identical quality and performance from its different production plants across regions”. This highlights the complexity of producing high-nickel cathode materials at scale with consistently high quality. Given the high temperatures required to produce high-nickel NCM cathode materials, it is extraordinarily complex to produce NCM consistently with a high proportion of the correct hexagonal crystal lattice structure. This structure is necessary to provide the high energy density properties of >60% nickel cathode materials.


Roskill produces a range of reports on the lithium-ion battery market and its raw material supply chains. These reports provide detailed analysis of trends in supply, demand and pricing, as well as forecasts for the next decade. The following editions have been released in 2019, click to download a report’s brochure and sample pages, or to access further information.

Lithium-ion Batteries: Outlook to 2028, 3rd Edition

Cobalt: Outlook to 2029, 15th Edition

Nickel Sulphate: Outlook to 2028, 15th Edition

Manganese: Outlook to 2029, 15th Edition

Natural & Synthetic Graphite: Outlook to 2028, 12th Edition

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This article was written by Jose Lazuen. Please get in touch below if you wish to discuss further:

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