Hyundai Motor Group Partners with Korea Zinc on Value Chain for EV Business
- Two companies to collaborate on sourcing and processing of nickel, securing intermediate materials, and exploring new business opportunities, including recycling business
- The Group aims to become the global leader in electrification and plans to establish a stable supply of key raw materials for EV batteries
- The partnership to help the Group acquire 50% of the nickel needed to produce EV batteries that meets the Inflation Reduction Act (IRA) requirements by 2031
- The Group actively pursuing other global partnerships to secure key EV battery raw materials such as lithium
SEOUL, August 30, 2023 – Hyundai Motor Group (the Group) announced today the signing of an MOU with Korea Zinc. The Group will cooperate with Korea Zinc, Korea's leading non-ferrous metal smelting company, in a comprehensive collaboration across the nickel value chain.
The MOU signing ceremony was participated by Heung-soo Kim, Executive Vice President and Head of Global Strategy Office, Hyundai Motor Group and Ki Duk Park, President and Co-CEO of Korea Zinc.
The partnership includes joint sourcing of nickel raw material, processing of nickel raw material, and ensuring a stable supply of processed nickel and battery materials, and exploring new businesses, including battery recycling.
The two partners plan to work towards establishing a stable nickel supply chain, a critical raw material for EV batteries. Also, both plans to jointly purchase nickel raw materials and invest in mine development projects to source raw materials that meet IRA requirements.
In April, the Group 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. The Group 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 sulfate 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 to build this year a nickel smelter in the Industrial Complex in Ulsan.
Nickel supply from the partnership is planned to commence in 2026. In 2031, the Group intends to source 50 percent 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 the Group securing stable EV battery raw materials that meet other regional EV-related regulations, the European Union's Critical Raw Material Act (CRMA), as well as other ESG 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 percent stake in Korea Zinc.
The share price is approximately KRW 504,333 per share, with a total transaction value of about KRW 527.2 billion. The stock acquisition and payment related to equity investment are scheduled for September 12th, and the transfer of shares will be restricted until one year after the purchase.
Furthermore, Hyundai Motor Group secured the right to suggest one non-executive director. Along with the share acquisition, the move aims to strengthen strategic ties between two parties and bolster cooperation on EV business value chain.
About Hyundai Motor Group
Hyundai Motor Group is a global enterprise that has created a value chain based on mobility, steel, and construction, as well as logistics, finance, IT, and service.
With about 250,000 employees worldwide, the Group’s mobility brands include Hyundai, Kia, and Genesis.
Armed with creative thinking, cooperative communication, and the will to take on any challenges, we strive to create a better future for all.
For more information about Hyundai Motor Group, please see: www.hyundaimotorgroup.com