South Korean chemical company LG Chem has signed a memorandum of understanding with China-based Huayou Group to construct four plants in Morocco and Indonesia.

The facilities include a lithium-phosphate-iron (LFP) cathode material plant and a lithium conversion plant in Morocco.

Meanwhile, an acid-leaching plant and a precursor plant will be developed in Indonesia.

LG Chem CEO Shin Hak-Cheol said: “We will actively respond to the emerging LFP cathode material market with the Morocco plant as our global base.

“Our goal is to create a strong, vertically integrated material supply chain - flowing from raw materials to precursors and cathode materials - and solidify our status as the world’s top comprehensive battery materials producer.”

The Morroco plant is set to have a capacity of 50,000 tonnes per annum (tpa).

This plant will be built in partnership with Huayou subsidiary Youshan and is scheduled to begin production in 2026.

As Morocco is a signatory to the US Free Trade Agreement, the LFP cathode materials manufactured at this facility will be provided to the North American market and subsidised under the US Inflation Reduction Act (IRA).

According to the IRA’s Foreign Entity of Concern requirements, both parties will amend their shares.

Through this Moroccan facility, LG Chem will enter the LFP cathode materials sector and subsequently expand into lithium-manganese-phosphate-iron cathode materials production.

Additionally, LG Chem will support the lithium conversion facility with Huayou Cobalt in Morocco.

This lithium conversion facility is anticipated to have the capacity to produce 52,000tpa of lithium by 2025 and will also provide the material to the LFP plant.

Aside from the Morocco-based plants, the companies plan to build a precursor plant in Indonesia, comprising a production capacity of 50,000tpa.

Both businesses are also discussing the development of a mixed hydroxide precipitate extraction plant.