TL;DR - L&F (066970.KQ, ₩3.3T market cap) has made a strategic investment in CIS Chemical, securing South Korea's only commercially proven hydrometallurgical post-processing technology for LFP batteries - CIS Chemical achieves approximately 98% lithium carbonate recovery — among the highest disclosed recovery rates for LFP recycling globally - The deal completes L&F's full-stack recycling model: preprocessing via subsidiary JHC Chemical Industry → post-processing via CIS Chemical - Two Korean regulatory shifts provide tailwind: battery recycling reclassified as "critical mineral manufacturing" (January 2026) and the Act on the Management and Fostering of Used Batteries (May 2026) - L&F is simultaneously launching Korea's first non-Chinese LFP cathode mass-production facility (L&F Plus, 30,000 MT/yr, Q3 2026 start), making recycled feedstock essential for cost parity with Chinese rivals
Part A — The Deal
L&F Co. (066970.KQ), South Korea's battery cathode materials specialist, announced on July 21, 2026 that it has made a strategic investment in CIS Chemical Co.—a move that gives L&F access to South Korea's only commercially proven post-processing technology for lithium iron phosphate (LFP) battery recycling.
The strategic investment formalizes a partnership that began with a memorandum of understanding signed in May 2026 covering LFP and nickel-cobalt-manganese (NCM) recycling cooperation, and was formalized with an investment agreement signed June 30.
Deal Scope
Under the arrangement, L&F and CIS Chemical will cooperate across four areas:
| Area | Description |
|---|---|
| Clean-MHP Development | High-purity mixed hydroxide precipitate for NCM cathode recycling |
| LFP Recycling Commercialization | Scale-up of CIS Chemical's hydrometallurgical LFP post-processing |
| LFP Material Regeneration | Joint development agreements for re-materializing recycled LFP |
| National Projects | Joint participation in Korea's critical mineral recycling support programs |
L&F CEO Heo Je-hong said: "L&F has now secured post-processing competitiveness on top of its existing recycling capabilities focused on preprocessing."
No investment amount was disclosed.
About CIS Chemical
CIS Chemical, led by CEO Lee Seong-oh, is the only South Korean company to have successfully commercialized LFP post-processing recycling. Its proprietary hydrometallurgical technology achieves approximately 98% lithium carbonate recovery — and has already completed technology verification with major domestic battery clients.
Part B — Why This Matters for Korean Battery Investors
1. Closing the Recycling Stack
L&F already controls the upstream half of battery recycling through its subsidiary JHC Chemical Industry, which handles preprocessing — collecting spent battery cells and black mass (the slurry of active materials after shredding), and converting them into cathode precursor inputs.
The more margin-rich step, post-processing — where precursors are refined back into battery-grade active materials — had previously remained outside L&F's scope. CIS Chemical fills that gap precisely.
With post-processing capability added to JHC's preprocessing:
Cell → Shredding → Black Mass (JHC) → Precursor → Battery-Grade Material (CIS Chemical) → Cathode Production (L&F)
This integrated loop closely mirrors the model that drove POSCO HY Clean Metal's utilization rate from 26% in 2022 to 95% in 2023, with revenue rising nearly fourfold over the same period. Integrated recyclers typically capture two to three times the margin of preprocessing-only operators.
2. LFP Mass Production + Recycled Feedstock — A Strategic Double-Down
L&F is simultaneously deploying L&F Plus, a ₩338.2 billion (approximately USD 228 million) LFP cathode production facility at Daegu's National Industrial Complex. Phase 1 capacity of 30,000 metric tons per year is on track to begin in late Q3 2026, with Phase 2 expanding to 60,000 MT/yr in H1 2027 — making L&F the first non-Chinese company to produce LFP cathode at industrial scale. Chinese firms currently control more than 95% of global LFP cathode material shipments.
LFP profitability depends heavily on lithium carbonate feedstock cost. Internally recycled lithium from CIS Chemical offers two compounding benefits:
- Downside hedge: if spot lithium carbonate prices rise, recycled lithium provides a partially decoupled input source
- Structural cost advantage: as Korea's EV fleet ages and battery scrap volumes grow, per-unit recycled lithium costs fall — while mined lithium costs track global commodity cycles
The EU Battery Regulation further compels the shift: minimum recycled-content mandates for lithium (4% by 2028, rising to 10% by 2031) create compliance pull for Korean cathode suppliers targeting European OEM customers.
3. Regulatory Tailwinds Are Now Live
Two Korean policy actions have materially improved the battery recycling business case:
Act on the Management and Fostering of Used Batteries (May 2026) Korea's first comprehensive legal framework for spent battery collection, processing, and material recovery. The law formally establishes recyclers' rights to battery scrap from EV manufacturers and sets industry quality standards — reducing regulatory uncertainty that had previously discouraged investment.
Battery Recycling Reclassified as Critical Mineral Manufacturing (January 2026) Removing the "waste treatment" classification unlocks two concrete advantages: 1. Recycling facilities can now co-locate with cathode production plants in industrial complexes — previously prohibited 2. Companies gain access to the government's Critical Mineral Resource-Circulation Facilities and Equipment Support Programme
Korea's Ministry of Trade, Industry and Energy has set a 20% battery recycling rate target by 2030, with the domestic market forecast to reach ₩100 trillion by that year.
4. Market and Valuation Context
L&F (066970.KQ) traded at approximately ₩82,800 on July 21, 2026, giving it a market capitalization of roughly ₩3.3 trillion (approximately USD 2.2 billion). The cathode sector has faced earnings pressure since the 2022 lithium price collapse; Q2 2026 earnings are expected to be reported on August 7, 2026, with year-over-year comparisons expected to improve as lithium prices stabilize.
The CIS Chemical investment adds optionality without requiring L&F to build its own post-processing capacity: the capital cost of hydrometallurgical infrastructure is CIS Chemical's sunk cost, while L&F gains preferential access to the technology and material flow.
For investors underwriting a medium-term recovery in EV demand and a structural shift away from Chinese battery supply chains, L&F's positioning — dual NCM/LFP cathode production combined with domestic recycling integration — represents a differentiated thesis among non-Chinese cathode peers.
This article is for informational purposes only and does not constitute investment advice. L&F's transition involves significant capital commitments and execution risk. Battery cathode markets remain cyclical and subject to EV demand and lithium commodity price volatility.
Sources: 1. L&F Strengthens NCM and LFP Recycled Material Supply Chain — Asia Business Daily (July 21, 2026) 2. L&F Partners with CIS Chemical on Battery Recycling — The Elec 3. L&F Makes Strategic Investment in CIS Chemical for Battery Recycling — Seoul Economic Daily 4. ELNFF Partners with CIS Chemical for Strategic Investment in Battery Recycling — Aju Press 5. L&F Becomes First in South Korea to Mass-Produce LFP Cathode Materials — BigGo Finance 6. Korea Reclassifies Battery Recycling as Critical Mineral Manufacturing — Digital Today
