Hyundai Motor, Korea Zinc partner to secure stable nickel supply for EV batteries
Hyundai Motor Group, a global automotive giant, has announced a Memorandum of Understanding (MOU) with Korea Zinc, the leading non-ferrous metal smelting company in Korea. The partnership aims to establish a comprehensive collaboration across the nickel value chain, critical for electric vehicle (EV) batteries. The MOU was signed by Heung-soo Kim, Executive Vice President and Head of Global Strategy Office at Hyundai Motor Group, and Ki Duk Park, President and Co-CEO of Korea Zinc.
The collaboration involves joint sourcing of nickel raw material, processing, ensuring a stable supply of processed nickel, battery material production, and exploring new avenues such as battery recycling. Both partners have strategic plans to set up a stable nickel supply chain to meet Internal Rate of Return (IRA) requirements, a crucial component for the manufacturing of EV batteries.
Hyundai Motor Group had earlier disclosed its ambitious plans to emerge as a global leader in the EV segment by producing 3.64 million EVs by 2030. To meet this objective, the Group is actively engaging with global partners specializing in the procurement and processing of essential raw materials like nickel and lithium.
Hyundai Motor partners with Korea Zinc for secure stable nickel supply for EV batteries. Photo courtesy of Hyundai Motor Company.
Leveraging its extensive experience in smelting non-ferrous metals such as zinc and silver, Korea Zinc had already established a nickel sulfate production subsidiary for EV batteries in 2017. The company has been focusing on expanding its footprint in the EV battery materials sector, particularly in nickel. They have plans to set up a nickel smelter in Ulsan’s Industrial Complex later this year.
The nickel supply from this collaboration is expected to commence in 2026. By 2031, Hyundai Motor Group plans to source 50% of its nickel requirements for EV batteries from its partnership with Korea Zinc. This will enable the Group to comply not just with IRA but also with other stringent international regulations like the European Union’s Critical Raw Material Act (CRMA) and various Environmental, Social, and Governance (ESG) requirements.
In a significant move, HMG Global, a joint venture established collaboratively by Hyundai Motor, Kia, and Hyundai Mobis, is set to acquire a 5% stake in Korea Zinc at a share price of approximately KRW 504,333 per share. The total value of this transaction is pegged at about KRW 527.2 billion. This equity investment is slated for September 12th, with share transfer restrictions applicable for one year post-acquisition.
Hyundai Motor Group has also secured the right to suggest one non-executive director as part of the share acquisition. This move is aimed at strengthening strategic relations between the two companies and boosting cooperation across the EV business value chain.
This partnership sets the stage for a more robust nickel supply chain, reinforcing Hyundai Motor Group’s position in the competitive EV market while also enhancing Korea Zinc’s role as a key player in the battery materials sector.