SEOUL, Nov. 3 (Yonhap) -- POSCO Future M Co. said Tuesday that Hyundai Motor Group will consider investing in its artificial graphite anode material plant in Vietnam and securing priority purchase rights.
Under a letter of intent (LOI) signed by the two companies, the South Korean automotive group will consider investing 100 billion won (US$74.5 million) in the second phase of the project in exchange for priority purchase rights, POSCO Future M said in a press release.
The LOI follows Vietnamese authorities' approval of POSCO Future M's project, which will mark its first overseas production base for the battery component.
With priority purchase rights, Hyundai Motor Group is expected to secure a stable supply of battery materials in global markets, the press release said.
The move comes amid growing demand for artificial graphite, a key material that improves a battery's fast-charging performance and lifespan. Supply, however, remains concentrated in a limited number of countries, underscoring the need to diversify sourcing.
In March, POSCO Future M signed a 1.01 trillion-won deal to supply artificial graphite anode materials to a global automaker.
POSCO Future M is the battery materials unit of the country's leading steelmaker, POSCO Holdings Inc.
This graphic image provided by POSCO Future M depicts its artificial graphite anode material plant under construction in Vietnam. (PHOTO NOT FOR SALE) (Yonhap)
This graphic image provided by POSCO Future M depicts its artificial graphite anode material plant under construction in Vietnam. (PHOTO NOT FOR SALE) (Yonhap)