Automotive group Hyundai Motor Group has announced a partnership with ferrous metals smelting firm Korea Zinc to establish a stable supply chain for nickel – a critical raw material for electric vehicle (EV) batteries.
Hyundai and Korea Zinc will jointly be sourcing and processing nickel raw material, and will be exploring new businesses, including battery recycling.
The two partners also plan to jointly purchase nickel raw materials and invest in mine development projects to source raw materials that meet the US Inflation Reduction Act (IRA) requirements.
In April, Hyundai unveiled its plan to achieve global EV leadership by producing 3.64-million EVs, positioning itself among the top three global EV manufacturers by 2030.
To support this aim, the group is prioritizing procurement of key raw materials such as nickel and lithium. Hyundai is actively seeking collaborations with various global partners specializing in the procurement and processing of raw materials and the manufacturing of battery materials.
Leveraging its expertise in smelting non-ferrous metals like zinc and silver, Korea Zinc established a subsidiary for nickel sulphate production for EV batteries in 2017. The company is focusing on expanding its presence in the EV battery business with a focus on nickel. The expansion includes establishing a subsidiary to produce precursor for EV batteries and plans this year to build a nickel smelter in the Industrial Complex in Ulsan.
Nickel supply from the partnership is planned to start in 2026. In 2031, the group intends to source 50% of the nickel needed to produce EV batteries that meet the IRA requirements from the partnership with Korea Zinc.
The nickel supply is also expected to contribute to Hyundai securing stable EV battery raw materials that meet other regional EV-related regulations, the European Union's Critical Raw Material Act, as well as other environmental, social and governance requirements.
As part of the collaboration, HMG Global, an overseas joint venture established collaboratively by Hyundai Motor, Kia, and Hyundai Mobis, plans to acquire a 5% stake in Korea Zinc.
The share price is approximately KRW504.333 a share, with a total transaction value of about KRW527.2-billion.
Furthermore, Hyundai has the right to suggest one nonexecutive director. Along with the share acquisition, the move aims to strengthen strategic ties between the two parties and bolster cooperation on EV business value chain.