Hyundai Motor Group (the Group) has announced a significant collaboration with Korea Zinc, a prominent non-ferrous metal smelting company based in Korea. The partnership aims to establish a comprehensive cooperation across the nickel value chain, a critical component in the production of electric vehicle (EV) batteries.
MOU Signing and Participants
The memorandum of understanding (MOU) signing ceremony was attended 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.
Comprehensive Collaboration Scope
The collaboration encompasses various aspects of the nickel value chain. Hyundai Motor Group and Korea Zinc plan to jointly source nickel raw materials, process these materials, ensure a consistent supply of processed nickel and battery materials, and explore potential new business opportunities, including battery recycling.
Securing Stable Nickel Supply for EV Batteries
One of the primary objectives of this partnership is to establish a secure nickel supply chain. Nickel is a vital raw material used in the production of EV batteries. Both parties intend to engage in collective nickel raw material procurement and invest in mine development projects to acquire raw materials that fulfill International Raw Material Assessment (IRA) requirements.
Supporting Hyundai’s Global EV Leadership Plan
Hyundai Motor Group revealed its ambitious strategy to attain global EV leadership, aiming to manufacture 3.64 million electric vehicles by 2030. This initiative places the Group among the top three global EV manufacturers.
To realize this vision, the Group is prioritizing the procurement of essential raw materials such as nickel and lithium. Collaborations with global partners specializing in raw material procurement, processing, and battery material manufacturing are being actively sought.
Korea Zinc’s Role in EV Battery Business
Leveraging its expertise in smelting non-ferrous metals, including zinc and silver, Korea Zinc established a subsidiary dedicated to producing nickel sulfate for EV batteries in 2017. The company’s focus on the EV battery sector, particularly nickel, has led to the establishment of a subsidiary for producing precursor materials for EV batteries. Additionally, plans are in place to construct a nickel smelter in Ulsan’s Industrial Complex later this year.
Nickel Supply Timeline and Goals
The partnership envisions the commencement of nickel supply by 2026. By 2031, Hyundai Motor Group aims to secure 50 percent of the required nickel for EV battery production, which meets IRA requirements, from its collaboration with Korea Zinc.
This anticipated nickel supply also plays a role in ensuring Hyundai’s access to stable raw materials for EV batteries in compliance with other regional EV-related regulations, the European Union’s Critical Raw Material Act (CRMA), and other environmental, social, and governance (ESG) requirements.
Strengthening Ties through Investment
As part of the collaboration, HMG Global, an overseas joint venture involving Hyundai Motor, Kia, and Hyundai Mobis, is planning to acquire a 5 percent stake in Korea Zinc. The transaction is valued at approximately KRW 527.2 billion, with shares scheduled for acquisition on September 12th. Hyundai Motor Group will have the right to nominate a non-executive director as part of this investment.
This strategic move aims to deepen the partnership between the two entities and enhance their cooperation across the EV business value chain.
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