L&F builds 60,000-ton LFP cathode plant on rising ESS orders

L&F initiated plans on Nov. 4, 2026, to construct a 60,000-metric-ton lithium iron phosphate cathode facility in Daegu, doubling its capacity to satisfy contracted orders from domestic battery cell manufacturers.

The planned addition adds a second dedicated production unit next to its existing Daegu plant. The move will raise the company's total annual capacity of lithium iron phosphate — the lower-cost battery chemical known as LFP — to 120,000 metric tons.

The 60,000-ton expansion doubles L&F's existing capacity, matching an order backlog across South Korea's three major cell makers valued at roughly 2.8 trillion won ($2.1 billion).

The decision followed a binding sales contract signed with LG Energy Solution on Nov. 2, 2026, and disclosed on Nov. 3, 2026. That transaction is valued at 1.035 trillion won ($774 million) over four years.

The LG Energy Solution contract equals 48% of L&F's 2025 annual revenue of 2.155 trillion won ($1.61 billion), according to a regulatory filing submitted to the Financial Supervisory Service.

Deliveries to LG Energy Solution will run from 2028 through 2031. The volume will supply the cell maker's domestic and international manufacturing sites.

The order book also includes a 1.607-trillion-won ($1.07 billion) multiyear LFP supply contract signed with Samsung SDI in March 2026. That contract covers deliveries from 2026 through 2029, with a three-year extension option.

L&F also secured a 161.7-billion-won ($118 million) cathode supply agreement with SK On in September 2026. The contract supplies energy storage cells scheduled for manufacturing through late 2028.

Delivery schedules for LG Energy Solution overlap directly with volumes committed to Samsung SDI between 2028 and 2029. That collision forced L&F to accelerate capital spending for the second unit.

The company's wholly owned subsidiary, L&F Plus, completed Plant 1 in the Guji National Industrial Complex in May 2026. Commercial shipments from an initial 30,000-ton line began at the end of September 2026.

L&F Plus is installing an additional 30,000 metric tons of line capacity at Plant 1, aiming for 60,000 metric tons of operational run-rate by the first half of 2027.

The entire 60,000-metric-ton output of Plant 1 is already fully contracted to existing customers, company officials said. Running the initial lines at 100% utilization cannot absorb LG Energy Solution's volume without new floorspace, an official said.

L&F plans to finance the second facility through policy bank loans and state-backed growth funds instead of issuing bonds with warrants, company officials said. The financing structure aims to avoid diluting equity holders.

The expanded capacity targets utility-scale energy storage systems, known as ESS, deployed alongside AI data centers and renewable electricity installations. Grid operators favor LFP over nickel-rich chemistry because the material does not release oxygen at high temperatures, reducing thermal runaway risks.

Rising power consumption from compute clusters has driven grid operators to order large-format batteries on accelerated schedules. Cell builders are substituting nickel-manganese-cobalt cathode with iron phosphate to lower procurement overhead.

Policy rules in North America are reinforcing the procurement shift. Cell makers qualify for federal clean energy manufacturing tax credits only if components comply with Foreign Entity of Concern guidelines, known as FEOC restrictions.

The non-PFE standards applied to utility grid batteries restrict cells containing critical materials sourced from designated Chinese entities. South Korean cell makers must source non-Chinese cathode to keep their North American packs eligible for incentives.

Domestic rivals POSCO Future M and LG Chem are also preparing LFP cathode lines, but their volume shipments are scheduled later. Combined production capacity across competing domestic manufacturers will total roughly 200,000 metric tons, trailing projected demand, L&F estimated.

To guard against upstream supply chokepoints, L&F is engineering domestic iron phosphate precursor synthesis lines. The company is also testing precursor-free ferric oxide manufacturing methods to replace refined Chinese intermediate inputs.

L&F also maintains a supply agreement with US-based battery technology firm Coreshell Technologies, covering specialty cell applications across defense and mobility markets.

The company has not published the total capital expenditure figure or the detailed construction schedule for Plant 2 in a formal regulatory disclosure.

Deliveries under the LG Energy Solution contract take effect Jan. 1, 2028, requiring L&F to break ground on the second facility by early 2027 to finish qualification testing.