L&F makes strategic investment in CIS Chemical to strengthen battery recycling supply chain

Battery materials maker L&F is expanding its cooperation in the battery recycling sector, moving proactively to secure a recycled raw materials supply chain in step with regulatory reforms on used batteries and the growing push to mandate recycled material usage.

L&F announced Tuesday that it signed a strategic investment agreement with CIS Chemical at its Daegu headquarters on Monday. The signing ceremony was attended by L&F CEO Heo Je-hong, Chief Financial Officer Ryu Seung-heon, Chief Production Officer Jang Seong-gyun, and CIS Chemical CEO Lee Seong-o, along with other senior officials from both companies.

The investment follows an MOU the two companies signed in May for cooperation on LFP (lithium iron phosphate) and NCM (nickel-cobalt-manganese) battery recycling. Through the partnership, L&F plans to stabilize a recycled-material-based supply chain and strengthen its capacity to meet customers' recycling demand.

L&F intends to use CIS Chemical's recycling technology to secure post-processing volumes for LFP and NCM batteries. The two companies have also agreed to jointly respond to customer demand by giving L&F priority allocation of LFP recycling processing capacity by 2027.

The companies will also pursue joint research and development, targeting high-purity mixed hydroxide development to reduce cathode material costs and the acquisition of LFP recycling and re-materialization technology. They plan to broaden their cooperation to include participation in government-funded national R&D projects.

L&F expects the partnership to increase its use of recycled raw materials such as lithium carbonate. CIS Chemical holds recycling technology capable of recovering lithium carbonate at a rate of around 98%, based on its proprietary process, and has already completed technical validation of its LFP recycling technology with major domestic customers.

With few companies in South Korea having commercialized LFP post-processing, L&F aims to secure stable processing capacity through the CIS Chemical partnership. Alongside this, the company plans to strengthen its recycling business for spent cathode materials and black mass in conjunction with its subsidiary JH Chemical Industry (JHC).

Group-level cooperation will also proceed in parallel. L&F will pursue scrap processing cooperation for LFP spent cathode materials with its subsidiary L&F Plus, and is reviewing supply cooperation with Seronics for cathode material additives including cobalt hydroxide and boric acid.

The battery recycling market is growing in importance amid shifting regulations. In South Korea, a bill to foster the used battery industry and stabilize its supply chain passed the National Assembly plenary session in April. The EU is also phasing in mandatory requirements for recycled material usage in battery manufacturing.

Automakers, battery makers, and materials companies alike are increasingly focused on building circular economy systems spanning raw material procurement through collection and recycling. Securing recycled raw materials is also gaining strategic importance as a way to reduce volatility in critical mineral prices and mitigate supply chain risk.

"This investment is a strategic decision to proactively secure competitiveness in the battery recycling sector," L&F CEO Heo said. "Through close cooperation with CIS Chemical, we will strengthen the competitiveness of our recycled raw materials supply chain and build a recycling value chain that allows us to respond proactively to customer needs."

L&F is a battery materials company that has grown with high-nickel cathode materials as its core product. It has recently been expanding its product portfolio to include LFP cathode materials, broadening the scope of its battery materials business.