Hong Young-jun, vice president of POSCO Holdings, speaks during a press meeting in Jeju, April 25. Yonhap

POSCO Future M, the battery materials unit of POSCO Holdings, said Friday it will set up a joint venture (JV) with Honda Motor in Canada mainly for the supply of a core battery material to the Japanese carmaker.

The two companies have signed a memorandum of understanding to establish a joint company in Ontario to supply cathodes for Honda's vehicles assembled in Canada and the United States, POSCO Future M said in a statement.

Through the strategic partnership, they expect to secure a new growth driver in the North American markets by providing Honda's electric vehicles (EVs) with POSCO Future M's high-end battery materials, it said.

In July 2022, POSCO Future M set up a similar JV with U.S. carmaker General Motors (GM) in Quebec, Canada. The JV named Ultium CAM plans to complete a cathode plant there later this year.

POSCO Future M, formerly POSCO Chemical, has mainly produced refractories and burnt lime, key materials used in the steelmaking process, since its foundation in 1971 as an arm of the country's leading steelmaker, POSCO.

In recent years, the company has been aggressive in establishing its presence in the secondary battery components business, particularly with the materials used to make cathodes and anodes — core materials used in lithium-ion cells for EVs.

POSCO Future M touts itself as one of the few companies capable of producing both cathodes and anodes.

It supplies cathodes to Samsung SDI, LG Energy Solution and Ultium Cells, the U.S. joint venture between LGES and GM. (Yonhap)