GS Affiliate Energy Materials Suspends Operations Amid Financial Woes, Pursues Sale
Profitability worsens amid feedstock shortages and falling metal prices
Operating rate at 30%... cumulative losses reach 170 billion won
Voluntary retirement offered to more than 130 employees... sale planned
GS E&C's waste battery recycling subsidiary Energy Materials has halted operations at its factory amid financial difficulties. Losses have mounted due to difficulties securing raw materials and falling prices for recovered metals, and the company is pursuing a sale after undertaking restructuring measures, including offering voluntary retirement.
Energy Materials, a secondary battery recycling company in Pohang, North Gyeongsang Province. Yonhap News Agency
View original imageAccording to industry sources, Energy Materials suspended operations at its factory in Pohang, North Gyeongsang Province, on October 28. It is also offering voluntary retirement to its more than 130 employees.
Founded in October 2020, Energy Materials has extracted battery metals, including lithium, nickel, cobalt, and manganese, from black powder, a black substance obtained by shredding and heat-treating waste batteries.
Despite large-scale investment in facilities, the factory's operating rate remained at around 30%. Because of the time lag between the adoption of electric vehicles and the eventual disposal of their batteries, the company could not secure enough feedstock for processing. The decline in selling prices for recovered metals further worsened profitability.
With the factory operating at a low rate, the company continued to bear fixed costs for facilities and personnel, and its cumulative losses reached about 170 billion won. The company pursued cost reductions, workforce efficiency measures, diversification of raw-material suppliers and product buyers, and efforts to attract new investors, but was unable to overcome its financial difficulties.
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Challenges in the battery recycling industry are also continuing overseas. Canada's Li-Cycle filed for bankruptcy protection in May 2025, while U.S.-based Ascend Elements filed for restructuring proceedings in April 2026 due to financial difficulties.
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