UPDATE 1-LG Chem to invest over $3 bln to build battery cathode plant in U.S.

(Adds details of plan from LG Chem's statement)

By Heekyong Yang

SEOUL, Nov 22 (Reuters) - LG Chem Ltd said on Tuesday it plans to invest more than $3 billion to build a battery cathode factory in Tennessee, as the South Korean chemical materials maker ramps up plans to meet rising demand for U.S. electric vehicle (EV) components.

The plant aims to have an annual production capacity of 120,000 tonnes of cathode materials by 2027, enough to power about 1.2 million EVs, LG Chem said in a statement, adding mass production is set to start in the second half of 2025.

"With our Tennessee cathode factory, LG Chem plans to actively respond to changes in the global battery material market, such as the Inflation Reduction Act (IRA)," the company said in a statement.

LG Chem added that it is also pursuing cooperation in the raw material supply chain with mines and recycling companies to better support its customers to meet the IRA requirements.

In August, U.S. President Joe Biden signed into law a $430 billion bill which, among other measures, starting next year, will require at least 40% of the monetary value of critical minerals for batteries be from the United States or an American free-trade partner in order to qualify for U.S. tax credits. That share will rise to 80% in 2027.

The plant will create more than 850 new jobs. (Reporting by Heekyong Yang Editing by Chris Reese and Muralikumar Anantharaman)