Hyundai Motor Group (HMG) has announced it has signed an agreement with Korea Zinc Company Ltd, a leading non-ferrous metal smelting company, to establish a broad-based strategic partnership across the nickel value chain. 

The memorandum of understanding (MOU) was signed by HMG’s Executive Vice President Heung-soo Kim and Korea Zinc co-CEO Ki Duk Park at an event in Seoul this week. The partnership will focus on joint sourcing and processing raw nickel to help meet South Korea’s leading automaker’s electric vehicle (EV) battery materials requirements. The two companies will also explore new business opportunities, such as in the battery recycling sector.

To strengthen the partnership, HMG Global – a US-based investment joint venture between Hyundai Motor, Kia Corporation and Hyundai Mobis – will invest US$398m in a 5% stake in Korea Zinc.

The partnership aims to produce at least 50% of the nickel needed by HMG to produce electric vehicle (EV) batteries that meet the Inflation Reduction Act (IRA) requirements by 2031. Nickel supply from the partnership is expected to begin in 2026.

HMG said in a statement “the partnership aims to establish a stable nickel supply chain, a critical raw material for EV batteries. The two companies will jointly purchase nickel raw materials and invest in mine development projects to source raw materials that meet the requirements of the US Inflation Reduction Act (IRA) and the European Union’s Critical Raw Material Act (CRMA)”.

Earlier this year HMG said it aims to sell some 3.64 million EVs per year by 2030, which it says would make it a top 3 global EV maker. To achieve this goal, the automaker is “prioritising procurement of key raw materials such as nickel and lithium and is actively seeking collaborations with various global partners specializing in the procurement and processing of raw materials and the manufacturing of battery materials”.

Korea Zinc established a subsidiary for nickel sulphate production for EV batteries in 2017. It is now 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.

The company plans to build a nickel smelter in the Industrial Complex in Ulsan, South Korea, this year.

In 2022, Korea Zinc unveiled its intention to expand its business from non-ferrous metal smelting and would spend US$7.4bn on battery materials, green hydrogen, and renewable energy up to 2030.