Korean Zinc and commodities trader Trafigura are in advanced talks to form a joint venture to build a nickel smelter as part of the Korean company’s expansion in renewable energy, batteries and resource recycling, they said late on Wednesday.
Nickel is one of the key materials used to make electric vehicle batteries.
As part of the deal, Trafigura along with Morgan Stanley and Korea Investment & Securities will take a stake in Korea Zinc through treasury shares worth 372.3 billion won ($280 million). Trafigura will account for 202.5 billion won of that.
The proposed joint venture would also include a nickel sulphate refining project.
Korea Zinc also announced a 787 billion won ($592 million) investment in green hydrogen and the battery sector through a partnership with LG Chem and Hanwha.
“Diversifying supply chains and developing new refining and smelting capacity is urgently needed to meet the growing demand for electric vehicles,” said Trafigura CEO Jeremy Weir.
($1 = 1,329.3400 won)
(By Julia Payne; Editing by David Goodman)