L&F (엘앤에프; 066970.KQ), South Korea's leading cathode material producer, has taken a pre-IPO strategic stake in CIS Chemical (씨아이에스케미칼), a privately held battery mineral refining and recycling company, as Korea's battery supply chain undergoes rapid vertical integration.
The two companies signed an ordinary-share purchase agreement at L&F's Daegu headquarters on June 29, with fund transfer scheduled for early July 2026. Financial terms — including investment size and stake percentage — were not disclosed. CIS Chemical characterised the arrangement as a strategic investment (SI) rather than a financial-only position.
CIS Chemical: From Scrap to Precursor
CIS Chemical operates at the upstream end of the battery value chain, converting spent-battery materials and secondary raw materials into high-purity inputs:
- High-purity alumina ceramic materials and cathode material additives
- Used-battery and recycled-resource processing
- Proprietary SSX lithium recovery technology, delivering more than 1,500 tonnes per year of battery-grade lithium carbonate
- 20,000 tonnes per year of nickel-cobalt mixed hydroxide precipitate (MHP) — the key precursor input for high-nickel NCM cathode materials
The company has received A-grade technical evaluation ratings from two independent assessment agencies, underpinning the commercial readiness of its recycling processes.
Why L&F Is Writing the Cheque
For L&F, the investment fills a critical upstream gap. The company has historically sourced nickel and cobalt precursors from third parties, leaving it exposed to raw-material price swings and geopolitical supply disruptions — risks that have become acute as the EU Battery Regulation's recycled-content mandates phase in from 2026.
By backing CIS Chemical's in-house mineral recovery and recycling capabilities, L&F moves closer to a closed-loop model: recovering spent battery materials, refining them into MHP, and converting them into fresh cathode active materials at its own plants. L&F CEO Heo Je-hong (허제홍) attended the signing ceremony alongside CFO Ryu Seung-heon (류승헌), signalling board-level commitment to the partnership.
CIS Chemical CEO Lee Sung-o (이성오) said the partnership would "accelerate the construction of a circular economy ecosystem."
Pre-IPO Anchor Ahead of KOSDAQ Debut
CIS Chemical is targeting a KOSDAQ listing in Q3 2026, making L&F's participation a classic pre-IPO anchor round. If the timeline holds, L&F would crystallise an early-entry position in a publicly traded battery recycling platform — a category that commands premium valuations given tightening ESG requirements and rising nickel and lithium price volatility.
Industry Context
Korea's battery supply chain has faced mounting pressure to reduce dependence on Chinese critical mineral processors, particularly in the wake of U.S. Inflation Reduction Act restrictions on foreign entities of concern. L&F's move echoes similar vertical-integration bets by rivals: POSCO Holdings has expanded lithium and nickel processing through HY Clean Metal, and EcoPro has built precursor-to-cathode integration via EcoPro Materials (450080.KS). A pre-IPO partnership with a dedicated domestic recycler gives L&F a sourcing lever that neither competitor yet holds in precisely this recycled-mineral-to-cathode configuration.
The deal also comes at a pivotal moment for L&F, which has been navigating a multi-quarter destocking cycle in the EV cathode market. Locking in lower-cost, domestically sourced recycled precursors could help L&F defend margins when the cycle turns.
Sources: ETNews
