Posco Chemical has secured a deal worth $688.6 million with Ultium Cells, a US-based joint venture between LG Energy Solution and General Motors, to supply artificial graphite anode materials, the company said Monday.

According to the company’s regulatory filing, Posco Chemical will begin the supply of the key battery material from next year to the end of 2028 under the contract.

Artificial graphite anode materials, which are core components used in making batteries for electric vehicles, can offer quicker recharging speed and lengthen battery life.

The deal came about a year after Posco Chemical completed the construction of its Pohang plant in North Gyeongsang Province to localize the production of artificial graphite anode materials. Previously, artificial graphite anode materials were mostly produced in China due to the difficulties in getting the raw materials and high manufacturing costs.

Posco Chemical said the company plans to bolster its overseas anode materials business in Europe and the US through partnerships with carmakers and battery makers while strategically responding to certain policies to strengthen local supply chains such as the Biden administration’s Inflation Reduction Act.

Taking proactive approaches in expanding its global manufacturing capabilities, Posco Chemical said it will increase the production capacity of anode materials from the current 82,000 metric tons per year to 170,000 tons by 2025 and 320,000 tons by 2030.

"As the only anode materials company in Korea, we have set up a complete value chain from raw materials to materials production, and our business competitiveness through the expansion of our product portfolio has led to securing a contract," said Posco Chemical CEO Min Kyung-zoon. "Based on our stand-alone technology and competitiveness in raw materials, we will push for expanding global customers and become a global top-tier battery materials company by fostering the anode and cathode materials businesses in a balanced way."